VAT, CIT revenue up 60% to N8.5trn in 2023

Financial Markets

Federal Government’s revenue through the Value Added Tax (VAT) and Company Income Tax (CIT) increased by 59.9 percent to N8.54 trillion in 2023, from N5.34 trillion in 2022.

The fourth quarter, 2023 (Q4 2023) VAT and CIT figures released by the National Bureau of Statistics (NBS) yesterday, showed that VAT collections increased by 45.02 percent to N3.64 trillion from N2.51 trillion in 2022, while CIT collections rose by 73.14 percent to N4.9 trillion up from N2.83 trillion the previous year

NBS revealed that the VAT collections for Q4’23 was N1.20 trillion, marking a significant 26.61 percent increase on a quarter-on-quarter basis from N948.07 billion in Q3 2023.

This increase was driven by a combination of local payments, which amounted to N630.00 billion, foreign VAT payments at N326.27 billion, and import VAT contributions of N244.04 billion.

The report stated: “On the aggregate, Value Added Tax (VAT) for Q4 2023 was reported at N1.20 trillion, showing a growth rate of 26.61% on a quarter-on-quarter basis from N948.07 billion in Q3 2023. Local payments recorded were N630.00 billion, Foreign VAT Payments were N326.27 billion, while import VAT contributed N244.04 billion in Q4 2023.

“On a quarter-on-quarter basis, agriculture, mining and quarrying recorded the highest growth rate with 63.75%, followed by the other services activities with 61.98%. On the other hand, activities of extraterritorial organisations and bodies’ activities had the lowest growth rate with –19.44%, followed by financial and insurance with –8.46%.

On the other hand, CIT was N1.13 trillion, indicating a 35.40 percent decrease from N1.75 trillion in the previous quarter, with contributions from local payments at N533.93 billion and foreign CIT payments amounting to N596.10 billion.

NBS stated: “On the aggregate, CIT for Q4 2023 was reported at N1.13 trillion, indicating a growth rate of –35.40% on a quarter-on-quarter basis from N1.75 trillion in Q3 2023. Local payments received were N533.93 billion, while Foreign CIT Payment contributed N596.10 billion in Q4 2023.

“On a quarter-on-quarter basis electricity, gas, steam and air conditioning supply recorded the highest growth rate with 79.65%, followed by construction with 57.86%. On the other hand, activities of Information and communication –69.44, and Public administration and defense, compulsory social security –23.75 had the lowest growth rate.

“In terms of sectoral contributions, the top three largest shares in Q4 2024 were Manufacturing 12.84%, Financial and insurance activities 6.25%, and Mining and quarrying 5.90%. Nevertheless, Activities of households as employers, undifferentiated goods- and services producing activities of households for own use 0.00%, Water supply, sewerage, waste management and remediation activities 0.02%, and Activities of extraterritorial organizations and bodies 0.07%.”