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Manufacturing Sector Tops VAT and CIT Collection for Q2

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CEM REPORT, FINANCE | Value Added Tax (VAT) collected in the second quarter of 2023 (Q2’23) grew by 10.11 per cent to reach ₦781.35 billion

Similarly, Company Income Tax (CIT) grew by 226.40 per cent to reach a total collection of ₦1.53 trillion in the same period from ₦469.01 billion recorded in the preceding quarter (Q1’23).

According to the latest data released by the National Bureau of Statistics (NBS), the manufacturing sector contributed the highest to VAT and CIT in the quarter.

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The manufacturing sector contributed 25.63 per cent to the total CIT collection for the period. Followed closely by the insurance sector with 24.47 per cent while the information and communication sector contributed a substantial 20.30% share.

However, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.01 per cent; followed by activities of extraterritorial organizations and bodies with 0.06 per cent; and water supply, sewerage, waste management, and remediation activities with 0.09 per cent.

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Further analysis of the NBS data reveals that local payments contributed 1.02 trillion, while Foreign CIT Payment contributed ₦505.91 billion in Q2’23.

On a quarter-on-quarter basis, water supply, sewerage, waste management, and remediation activities recorded the highest growth rate with 626.52 per cent. Accommodation and food service activities follow with 585.11 per cent.

However, education had the lowest growth rate with 15.48 per cent, followed by public administration and defence, and compulsory social security with 25.46 per cent.

In a year-on-year analysis, CIT collections in Q2’23 grew exponentially by an impressive 114.28 per cent compared to Q2 2022.

On the other hand, the manufacturing sector contributed 29.64 per cent to the total ₦781.35 billion collected in VAT in Q1’23.

The information and communication sector followed afar with 21.19 per cent while the financial and insurance sector contributed 11.18 per cent.

In terms of sectorial growth extraterritorial organizations and bodies recorded a growth rate of 212.06 per cent, followed by the real estate sector with 123.09 per cent.

Activities of households as employers and undifferentiated goods- and services-producing activities of households for own use, experienced the lowest growth rate, recording -57.06 per cent. Agriculture, forestry, and fishing also faced challenges, with a growth rate of -32.86 per cent.

On a year-on-year contribution VAT collections for Q2’23 grew by 30.19 per cent compared to Q2’22.

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