Tax payments from foreign companies in Nigeria have surged by 44 per cent in the nine months to September 2024, according to a report by the National Bureau of Statistics (NBS).
BusinessDay reports that according to the Company Income Tax report by the statistics agency, revenue to the Federal Government rose to ₦2.57 trillion in 9’M from ₦1.79 trillion in the same period last year.
On a quarterly basis, Nigeria’s earnings from foreign companies’ CIT increased by 42.49 per cent from ₦598.1 billion in Q1 to ₦1.12 trillion in Q2 but slowed to ₦852.3 billion in Q3, suggesting a tough economic condition.
According to the Federal Inland Revenue Service, CIT is a 30 per cent tax imposed on companies’ profit, and VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services are rendered.
Foreign companies like Google, Netflix, Meta, Facebook, and other service providers, which are video streaming sites, social media platforms, and companies that offer downloads of digital content, are expected to pay digital tax to the Federal Inland Revenue Service.
However, these companies in Africa’s biggest economy had their bottom lines hit by the devaluation of the naira currency with some recording losses and some had a significant increase in nine months of 2024.
Companies like Netflix have lamented reduced patronage, reflecting the economic situation of the country where inflation is hammering the spending power of the citizens and making them prioritise their spendings.
However, further analysis of the NBS report showed that revenue from government tax on value-added tax rose by 157.03 per cent to ₦1.28 trillion in nine months of 2024 from N
₦498.3 billion in the same period last year.
VAT collection data revealed that Nigeria earned ₦435.7 billion in Q1, ₦395.7 billion in Q2, and ₦448.9 billion in Q1 2024.
In nine months, both taxes from foreign companies operating in Nigeria reflected a 68.1 per cent surge to ₦3.85 trillion compared to ₦2.29 trillion paid in nine months of 2023.
