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Tag: CIT

  • How companies paid N1.75trn as tax for Q3 2023

    How companies paid N1.75trn as tax for Q3 2023

    Companies paid N1.75 trillion as taxes in the third quarter of 2023, the National Bureau of Statistics (NBS) declared in its Company Income Tax (CIT) Q3 2023 report released in Abuja on Monday.

    On a year-on-year basis, the CIT collections in the third quarter of 2023 increased by 115.9 per cent compared to what obtained in the corresponding period of 2022.

    According to the report, the third quarter payment shows a growth rate of 14.27 per cent on a quarter-on-quarter basis compared to the N1.53 trillion CIT paid in the second quarter of 2023.

    The report explained that local payments received were N651.63 billion, while foreign CIT payment contributed N1.10 trillion in the third quarter of 2023.

    It explained also that on a quarter-on-quarter basis, the Education sector recorded the highest growth rate at 59.6 per cent, followed by public administration and defence, compulsory social security at 57.04 per cent.

    “On the other hand, activities of households as employers, undifferentiated goods-and-services-producing activities of households for own use had the lowest growth rate at minus 74.34 per cent.

    “This was followed by water supply, sewerage, waste management and remediation activities at minus 73.25 per cent,’’ it stated.

    In terms of sectorial contributions, the report showed that largest shares in Q3 2023 were ICT at 26.18 per cent, manufacturing at 23.9 per cent and mining and quarrying at 11.86 per cent.

    The NBS stated that on the other hand, activities of households as employers, undifferentiated goods-and services-producing activities of households for own use recorded the least share at 0.0 per cent.

    “This was followed by water supply, sewerage, waste management, and remediation activities at 0.04 per cent and activities of extraterritorial organisations and bodies at 0.10 per cent,’’ it added.

  • How Lagos based multinational companies evade tax since 2011 – FIRS chair

    How Lagos based multinational companies evade tax since 2011 – FIRS chair

    There is no more hiding place for government contractors in the payment of Stamp Duty, Withholding Tax and Company Income Tax (CIT).

    “Revenue collecting agencies are to deduct stamp duty, withholding tax and CIT from their contractors at the point of payment and promptly send these to the Federal Inland Revenue Service (FIRS) in lump sum, rather than staggered payments as it is the current practice”, Muhammad Nami, said in Lagos on Tuesday.

    The FIRS Chairman said: “This is better for everybody as we would all have to do less reconciliation and enforcement activities, and we can therefore use the saved time to expand the tax net.”

    Nami spoke during a visit to Governor Babajide Sanwo-Olu at the Lagos State House at Alausa, Ikeja,

    Nami during a visit to Governor Babajide Sanwo-Olu at the Lagos State House at Alausa, Ikeja

    He said that some multinational companies operating in Lagos – Nigeria’s commercial hub – have not been paying CIT since 2011.

    Nami said the tax-evading firms will be tracked down and put in the tax net.

    He said: “A number of multinational companies operating in Lagos State have not paid CIT since 2011 as they appeared to have perfected the illicit act of profit shifting to escape paying tax.

    “The FIRS and the Lagos State government need to collaborate to map out strategies to tax these tax-evading companies, whose goods and services we all consume or patronise and who also use public infrastructure to do their business but yet repatriate their profits home.

    “We need to tax them so that we can have the fund to combat insecurity, build and maintain public infrastructure and provide social amenities for Nigerians.”

    The FIRS boss also charged all tax-collecting agents in the public and private sectors to make correct collection and prompt remittance of all collectable taxes priority.

    Nami also clarified that the outstanding Value Added Tax (VAT) on contracts invoiced before the February 1, 2020 kick-off date for Finance Act 2019, should be paid on the old VAT rate, stressing that all collecting agencies in default in this regard should clear this up immediately.

    The FIRS chief urged the National Airspace Management Agency (NAMA) and similar collecting agencies to increase their diligence in collecting offshore taxation from service providers based outside Nigeria.

    “If you don’t take offshore tax from them, they will take it back to their countries and pay it there. But we need this money more in Nigeria to fight insecurity, build public infrastructure and provide social amenities for our people,” the FIRS chief said.

    In his presentation to the governor, Nami gave a broad overview of the palliatives to taxpayers in the Finance Act, to include a reduction in CIT for Small and Micro Enterprises (SMEs) from 30 per cent to 20 per cent; VAT exemption for SMEs who make a turnover of less than N25 million and a further cut by two per cent for corporate and individual taxpayers who file their CIT or Personal Income Tax (PIT) returns three months before due date.

    He canvassed a closer collaborative effort between the FIRS and the Lagos State government, especially in the area of information sharing, tax audit, correct collection and prompt remittance of CIT, PIT, Withholding Tax and Stamp Duty.

    Sanwo-Olu said the local economy has capacity to generate more than the N8.5 trillion the FIRS has been mandated to collect.

    The governor said: “When we look at our economic indices, and we need this money, it is only when the FIRS do well that we can get this money through the FAAC. We in Lagos pledge to work even closer with you in the FIRS to meet your target.

    “We also pledge to use the money judiciously in the service of the public when it comes back to us as allocation.”