Manufacturing Sector Lifts FIRS Q3 2022 Tax Collection by 28.76 % -NBS

The Manufacturing sector, in Q3, 2022 lifted the tax collection indices of the Federal Inland Revenue Services, FIRS overall revenue by 28.76 per cent.

According to the National Bureau of Statistics (NBS), Company Income tax for the third quarter of 2022, showed that the manufacturing sector, contributed 28.76 per cent in terms of sectoral contributions followed by the ICT sector which contributed 27.31 per cent, while the financial services sector ranked third at 8.81 per cent contribution.

The NBS, says the aggregate Company Income Tax (CIT) was reported at N810.19 billion for Q3 2022 which represents a growth rate of 13.41 per cent on a quarter-on-quarter basis from N714.40 billion in Q2 2022.

The report said local payments received were N483.17 billion, while foreign CIT payment contributed N327.02 billion in Q3 2022.

It added that on a quarter-on-quarter basis, the arts, entertainment, and recreation activities recorded the highest growth rate with 93.33 per cent, followed by agriculture, forestry, and fishing with 75.38 per cent.

While accommodation and food service activities on the other hand, had the lowest growth rate at 64.81 per cent.

“This was followed by water supply, sewerage, waste management, and remediation activities at -64.75 per cent,” the report said.

The report shows that tax collections from the ICT sector rose to N131.97 billion as against N53.36 billion in the corresponding period in 2021.

However going by quarter by quarter comparison, tax collection fell by 15.26 from N155.74 billion.

The Federal Government as part of the drive to increase its revenue from non-oil sources and support the implementation of the 2022 budget, made certain amendments to the Finance Act 2022.

Part of the changes made by the Federal Government was the introduction of taxes on Non-Resident Companies (NRCs) with digital presence in Nigeria. Section 30 was amended by introducing a new sub-section that allows the government to assess non-resident companies with a digital Significant Economic Presence (SEP) in Nigeria; to tax on a fair and reasonable percentage of their turnover attributable to the SEP in the instance where there is no assessable profit, or the assessable profit is less than what is to be expected from that type of business or cannot be ascertained.

As a reflection of increased activities in the information and communication technology (ICT) space, especially on the back of the outbreak of COVID-19, Company Income Tax (CIT) from ICT firms rose Year-on-Year (YoY) by a huge 147.30 percent in the third quarter ended September 30, 2022 (Q3’22).