The Federal Government through the Federal Inland Revenue Service (FIRS) generated a sum of N1.25 trillion in taxes in the first six months of 2022.
Investors King learnt that despite the humongous challenges facing small and large businesses in Nigeria, the country’s tax collection agency (FIRS), has significantly increased its tax generation over the years.
This is evident in the cumulative Company Income Tax (CIT) generated between 2020 and 2022.
Nigeria’s Company Income Tax grew from N697. 71 billion in the first (H1) of 2020 to N864.84 billion in the first half (H1) of 2021, and N1.25 trillion in the same period in 2022.
A closer perusal shows that tax generation has increased by almost 100 percent between 2020 and 2022.
Meanwhile, the above figure is indicative that Nigerian companies are gradually recovering from the adverse effects of Covid 19 pandemic.
In 2020, the imposed lockdown and restrictions on the movement of goods led to negative GDP growth of 3.62 in Q3, 2020. Nigeria also entered a second recession in five years.
The National Bureau of Statistics (NBS) indicated that company income tax for Q1 2022 stood at N551.53 billion while N714.40 billion was reported in Q2 2022. This, therefore, shows a 29.53 percent increment on a quarter-to-quarter basis.
Some of the largest contributors to company income tax (CIT) within the period under review include Manufacturing, Communications, Hospitality, Food Services, Accommodation, Information, Finance and Insurance.
According to the Vice President of Lagos Chamber of Commerce, Dr Gabriel Idahosa, “The tax revenue increase reflects the resumption of business by entities that closed down during the peak of COVID”
“These include hotels, airlines, restaurants, event centres, and other operators in the hospitality and tourism sectors of the economy. It also reflects a return to full operations of other sectors of the economy that were only doing very low levels of their normal capacity during the COVID period,” he concluded.