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The News Beam
Home News Business & Economy

Low patronage for Food, Entertainment, Hoteliers, tax payment drops 46% in Q1’22

May 26, 2022
in Business & Economy, Uncategorized
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In apparent reflection of the low business patronage that usually characterized the food and entertainment services in the first quarter of the year, the amount of Company Income Tax (CIT) paid by companies providing these service fell by N2.65 billion or 46% in the first quarter of the year, Q1’22 to N3.15 billion in the fourth quarter of last year, Q4’22.

In Nigeria companies that make more than N25 million annual revenue are mandated to pay Company Income Tax,CIT. The CIT rate for companies that make less than N100 million is N20% while it is 30% for companies that make above N100 million annual revenue.
Hence the more revenue a company makes the higher the Company Income Tax, CIT it pays the government. 

The food and entertainment industries are major beneficiaries of the  boom in economic activities in the fourth quarter of the year which is driven by preparation for end of the year festivities including xmas and new year holidays, weddings etc.

This boom is however followed by lull in economic activities in the first quarter which is characterised by reduction in social and festivities, leading to sharp decline in patronage and revenue for food and entertainment services.

Hence the sharp decline in taxes paid by the two industries in Q1’22. 

According to the latest Company Income Tax, CIT report just released by the Nigeria Bureau of Statistics, NBS, the CIT paid by Food and Accomodation activities in Q1’22 fell by N1.122bn or 51.07% to N1.075bn in Q4’21.

Similarly, the Company Income Tax, CIT paid by the Arts, entertainment and recreation services in Q1’22  fell by N1.53bn to N2.07bn from N3.6bn in Q4’22. 

Low patronage for Food, Entertainment, Hoteliers, tax payment drops 46% in Q1’22

Low Patronage for ITC services

Also reflecting decline in economic activities in the first quarter and hence low patronage, the Company Income Tax,CIT paid by companies providing  Information Communication services fell by N21.7bn or 42% to N29.35bn in Q1’22 from N51.1bn in Q4’21.

However, on the whole, the Company Income Tax, CIT paid by companies in the 21 economic activities  covered by the NBS report rose by N184.67bn to N532.48bn from N347.81bn in Q4’21. 

More Taxes Paid in Q1’22

The NBS report stated: “On the aggregate, Company Income Tax (CIT) for Q1 2022 was reported at N532.48 billion, a growth rate of 53.09% on a quarter-on-quarter basis from N347.81billion in Q4 2021. 

“Local payments recorded were N209.13 billion in Q1 2022, while Foreign CIT Payment contributed N323.35 billion. 

“On a quarter-on-quarter basis, the Activities of extraterritorial organizations and bodies recorded the highest growth rate with 60.61%, followed by Education with 39.76%, and Construction with 38.98%. 

“On the other hand, Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with – 79.94%, followed by Accommodation and food service activities with -51.07%. 

“In terms of sectoral contributions, the top three largest shares in Q1 2022 were Manufacturing with 21.31%, Information and communication with 14.03%, and Financial and insurance with 12.20%. 

“Conversely, the Activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.02%, followed by Activities of Water supply, sewerage, waste management and remediation with 0.19%, and “Activities of extraterritorial organizations and bodies with 0.34%. However, on a year-on-year basis, CIT collections in Q1 2022 increased by 35.61% from Q1 2021.”

ALSO READ: Revealed: 6 sectors that performed very well, boost Nigeria’s GDP in first quarter

Tags: Company Income TaxNational Bureau of StatisticsTax
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