The National Bureau of Statistics (NBS) has said the Company Income tax for the third quarter (Q3) of last year, showed that tax collections from the sector rose to N131.97 billion as against the N53.36 billion in the corresponding period in 2021.
However, on a quarter-by- quarter comparison, tax collection fell by 15.26 per cent from N155.74 billion. It said in terms of sectoral contributions, the Information and Communication Technology (ICT) sector contributed 27.31 per cent to the total company income in Q3’22, trailing behind the manufacturing sector, which contributed 28.76 per cent, while the financial services sector ranked third at 8.81 per cent contribution.
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 the 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 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.
As a reflection of increased activities in the 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 per cent in the third quarter ended September 30, 2022 (Q3’22).