Business and Economy

Revenues from VAT and CIT increased in Q2 of 2023

The National Bureau of Statistics (NBS) reports that in the second quarter of 2023 (Q2 2023), Value Added Tax (VAT) and Company Income Tax (CIT) revenues grew in Nigeria.

The total amount of company income tax for Q2 2023 was estimated to be N1.53 trillion, up from N469.01 billion in Q1 2023. This growth rate indicates a quarterly growth rate of 226.40%.

In Q2 2023, local payments totaled N1.02 trillion, while foreign CIT payments contributed N505.91 billion, according to the CIT report. Additionally, Value Added Tax for Q2 2023 was reported at N781.35 billion, representing an increase of 10.11% from N709.59 billion in Q1 2023 on a quarterly basis.

In Q2 2023, local VAT payments totaled N512.03 billion, compared to N142.63 billion in foreign VAT payments and N126.69 billion in import VAT. To lessen the need for public debt, the government must continue to receive this considerable rise in tax revenue.

By utilising technology and data analytics to detect tax evaders and improve the tax collection process, the government should first concentrate on improving tax compliance and collection procedures. Additionally, it is critical to keep the tax code simple and remove administrative roadblocks in order to motivate more organisations and people to voluntarily comply with tax laws. A culture of tax compliance can be promoted among the populace by funding tax education and awareness programmes.

In order to show citizens the practical advantages of taxes and to promote compliance, a portion of the additional tax income should be devoted to infrastructure improvement, education, and healthcare. To successfully employ tax dollars for public goods and services, the government must place a high priority on prudent fiscal management.

This will promote economic development and growth while maintaining accountability and openness. As a result, the economy will expand and produce more tax revenue. However, the government would need to further digitise the tax system and tighten controls on revenue leakages in all areas of the economy in order to maximise revenue from tax collection.

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