Manufacturers paid N62bn tax in Q1 – NBS

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The Company Income Tax that manufacturers paid rose by 29 per cent to N62bn in the first quarter of 2023  from N44bn in the same period last year, according to reports published by the National Bureau of Statistics.

The reports showed that from all sectoral contributions, manufacturers paid the highest income taxes, followed by information and communication technology and financial services.

A 13 per cent increase was also recorded in Value Added Tax raked in from manufacturers, as VAT from the sector was up from N112bn Q2022 to N129bn within the period in review.

The increase comes as taxes paid by manufacturers to the Federal Government rose by 60 per cent to N839.6 in 2022 from N524bn recorded in the prior year.

Data sourced from NBS  by The PUNCH showed that manufacturing company income tax rose significantly in 2022 to N468.59 compared with N235bn in the corresponding period in the previous year, while VAT collected from the sector rose to N477. 43bn from N288.4bn in 2021.

The taxes (VAT & CIT) are exclusive of other duties and levies paid by manufacturers to designated government agencies such as the Nigeria Customs Service.

Last month, the President of the Manufacturers Association of Nigeria, Francis Meshioye, urged the Federal Government to reverse the 2023 Fiscal Policy Measures scheduled to come into effect on June 1, 2023.

Meshioye said that the rate of the excise increase was exponential and excessively burdensome as the FPM increased the excise on beer products by about 200 per cent, while the tobacco industry was being taxed five times more than other industries.

He further stated that the increase was ill-timed because the manufacturing sector was in an acute recession and proceeds from sales were no longer sustaining business’ overheads and operating expenses.

He said, “The rate of increase is exceptionally excessive and not consistent with best practice globally. For instance, the excise for beer was effectively increased by about 200 per cent, translating to a tripling of excise on the product.

“The increase is coming at a time when the manufacturing sector is immersed in unprecedented crisis and an acute recession, due to extraordinary challenges, namely: sustained scarcity of naira, which has led to a crash in consumer purchases; limited access to foreign exchange, which has led industry to purchase foreign exchange from the parallel market, thereby increasing costs; record inflation, which further drive up cost of operation and prices of products and a struggling economy.”

 

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