FG Boosts Tax Revenue by N4.03trn with 150% CIT Surge

Samuel Mobolaji

The Federal Government generated a total of N4.03 trillion in tax revenue in the second quarter of 2024, marking a significant rise compared to the first quarter, according to data from the National Bureau of Statistics (NBS).

This increase was primarily driven by a surge in company income tax (CIT) collections, which saw an impressive 150.83 per cent jump from N984.61 billion in Q1 2024 to N2.47 trillion in Q2 2024.

Out of the N4.03 trillion, N2.47 trillion was generated through CIT, while N1.56 trillion came from Value Added Tax (VAT). This represents a 67 per cent increase from the N2.41 trillion collected in Q1 2024, underscoring the success of the government’s tax revenue collection efforts.

NBS reported that local CIT payments contributed N1.35 trillion, while foreign CIT payments added N1.12 trillion to the total in Q2 2024. The agriculture, forestry, and fishing sectors recorded the highest growth rate in CIT collections, with a staggering 474.50 per cent increase, followed by financial and insurance activities at 429.76 per cent, and manufacturing at 414.15 per cent.

Conversely, sectors like household employment and services saw the lowest growth rates, with household employer activities declining by 30.22 per cent and extraterritorial organizations and bodies dropping by 15.67 per cent.

In terms of sectoral contributions, financial and insurance activities accounted for the largest share at 15.53 per cent, followed by manufacturing at 8.99 per cent, and information and communication at 7.84 per cent.

Year-on-year, CIT collections in Q2 2024 increased by 59.52 per cent compared to Q2 2023, when N1.55 trillion was recorded.

The VAT segment also saw positive growth, with N1.56 trillion generated in Q2 2024, up 9.11 per cent from the N1.43 trillion collected in Q1 2024. Local VAT payments accounted for N792.58 billion, foreign VAT payments for N395.74 billion, and import VAT contributed N372.95 billion.

The human health and social work sector led VAT growth rates with a 98.44 per cent increase, while agriculture, forestry, and fishing followed closely with 70.26 per cent. Water supply and waste management also posted notable gains at 59.75 per cent.

However, sectors like household employer activities saw the steepest decline in VAT contributions, with a 46.84 per cent drop, followed by real estate, which fell by 42.59 per cent. Manufacturing, information and communication, and mining and quarrying were the top three contributors to VAT revenue, with shares of 11.78 per cent, 9.02 per cent, and 8.79 per cent, respectively.

On a year-on-year basis, VAT collections saw an impressive 99.82 per cent increase from Q2 2023.

These significant gains in tax revenue reflect the effectiveness of the government’s tax policies, reinforcing its ability to meet financial targets and bolster economic growth without introducing new taxes.