As a reflection of increased activities in the information and communication technology (ICT) space, especially on the back of the outbreak of COVID-19, Company Income Tax (CIT) from ICT firms soared Year-on-Year (YoY) by a huge 147.30 percent in the third quarter ended September 30, 2022 (Q3’22).
The National Bureau of Statistics (NBS) Company Income tax Report for Q3 2022, showed that tax collections from the sector rose to N131.97 billion in Q3’22 as against N53.36 billion in the corresponding period in 2021.
Meanwhile, the tax collection dropped by 15.26 percent on a Quarter-on-Quarter (QoQ) basis from N155.74 billion.
In terms of sectoral contributions, the ICT sector contributed 27.31 percent to the total company income in Q3’22, trailing behind the manufacturing sector, which contributed 28.76 percent, while the financial services sector ranked third at 8.81 percent contribution.
Recall that as part of the drive to increase its revenue from non-oil sources and support the implementation of the 2022 budget, the Federal Government made certain amendments to the Finance Act 2022.
Part of the changes was the introduction of taxes on Non-Resident Companies (NRCs) with digital presence in Nigeria.
Section 30 was amended by introducing a new sub-section that allows the government to assess non-resident companies with a digital Significant Economic Presence (SEP) in Nigeria; to tax on a fair and reasonable percentage of their turnover attributable to the SEP in the instance where there is no assessable profit, or the assessable profit is less than what is to be expected from that type of business or cannot be ascertained.
Source:Vanguard
