By Jemimah Wellington, JKNewsMedia Reporter
A 28.2% decline in Nigeria’s company income tax (CIT) revenue marked the third quarter of 2024, with total collections dropping to N1.77 trillion from N2.47 trillion in the preceding quarter, according to the National Bureau of Statistics (NBS).
The CIT, levied on profits of both local and foreign companies operating in the country, remains a critical revenue source for the federal government.
Local companies contributed N920.91 billion to the Q3 2024 collection, while foreign firms accounted for N852.29 billion.
Under Nigeria’s tax structure, companies earning over N100 million in turnover are taxed at 30%, while those earning between N25 million and N100 million pay 20%.
The manufacturing sector led with a 25.47% share of CIT revenue, followed by mining and quarrying at 18.37%, and information and communication at 15.07%.
Electricity, gas, steam, and air conditioning supply recorded the highest quarter-on-quarter growth at 47.51%. Public administration and defence also saw notable growth, contributing 19.25%.
Conversely, accommodation and food services reported the steepest decline, with a growth rate of -73.32%, trailed by financial and insurance activities at -70.04%.
Activities of households as employers contributed the least, with just 0.004%, followed by water supply and remediation activities at 0.03%.
Year-on-year, CIT revenue grew marginally by 1.37% compared to N1.74 trillion in Q3 2023.
Discussions in the national assembly on proposed tax reforms aim to further adjust the CIT structure, including increasing the tax threshold for small businesses from N25 million to N50 million and reducing the CIT rate to 27.5% by 2025 and 25% by 2026.
These reforms are expected to provide relief for small businesses while addressing revenue needs.
