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The Company Income Tax (CIT) is a tax on the profits made by incorporated organizations in Nigeria. It’s paid by both local businesses and foreign entities doing business in the country.
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This tax is a major source of revenue for the government, as it’s generated from numerous commercial entities located across the country. It’s administered and collected by the Federal Inland Revenue Service (FIRS), the tax authority at the federal governmental level. In the first nine months of 2020, company income tax received by the FIRS totalled over ₦1.1 trillion. That’s according to a report published recently by the National Bureau of Statistics, Nigeria’s official statistical agency. The report, titled Company Income Taxes by Sectors (2015-Q3 2020), details the CIT paid to tax authorities by organizations in various sectors, over a period of more than five years.
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According to NBS’s report, the following sectors paid the most company income tax between January and September 2020.
  1. Professional services, including telecoms: ₦148.09 billion
  2. Banks and financial institutions: ₦85.96 billion
  3. Other manufacturing (excluding petrochemicals, textile, paper, chemicals, paint, etc): ₦74.73 billion
  4. Commercial and trading: ₦49.129 billion
  5. Transport and haulage services: ₦43.366 billion
  6. Breweries, bottling and beverages: ₦42.037 billion
  7. State ministries and parastatals: ₦37.075 billion
  8. Oil production: ₦29.68 billion
  9. Federal ministries and parastatals: ₦16.196 billion
  10. Oil marketing: ₦13.798 billion
On the flip side, mining, textile and garment industries and local government councils have contributed the least in company income taxes thus far in 2020. Mining yielded ₦206.22 million in CIT; textile and garment brought in ₦255.59 million, and local government councils contributed ₦821.71 million. Company income taxes collected from local concerns (including local businesses) totalled ₦628.58 billion. Another ₦167.89 billion came from ‘other sources’. Foreign companies CIT payments were worth ₦317.246 billion.   Featured Image Source: National Bureau of Statistics
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This article was first published on 17th December 2020

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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