ICT Sector’s Income Tax Rises by 147% to N131.97 Billion in One Year

Company Income Tax (CIT) from ICT firms soared Year-on-Year (YoY) by a huge 147.30 percent in the third quarter ended September 30, 2022 (Q3’22).

The National Bureau of Statistics (NBS) Company Income tax Report for Q3 2022, showed that tax collections from the sector rose to N131.97 billion in Q3’22 as against N53.36 billion in the corresponding period in 2021.

Meanwhile, the tax collection dropped by 15.26 percent on a Quarter-on-Quarter (QoQ) basis from N155.74 billion.

In terms of sectoral contributions, the ICT sector contributed 27.31 percent to the total company income in Q3’22, trailing behind the manufacturing sector, which contributed 28.76 percent, while the financial services sector r&anked third at 8.81 percent contribution.

Click To Read: Nigerians Pay N1.09 Trillion Indirect Tax in H1 2022

Recall that 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 Non-Resident Companies (NRCs) with digital presence in Nigeria.

Also Read: FG Moves to Implement Telecoms, Beverage Taxes in 2023

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 and reasonable 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.

In other news, the Nigerian Communications Commission (NCC) disclosed that the telecoms operators recorded over N3 trillion as revenue in 2021. This was an increase from the N2.9 trillion made in revenue in the year 2020.

Also Read: MTN Clears Air on Tax Remittance Discrepancies, Remits N757.7 Billion in 2021

According to the the telecoms regulator in its 2021 Subscriber/Network Data Annual Report prepared by the commission’s Policy Competition and Economic Analysis Department on infrastructure deployment, a total number of 49,579 towers were deployed by the Mobile & Fixed Operators as well as Collocation and Infrastructure Companies. The operators also reported a total number of 38,288 Base Stations from 36,998 recorderd in December 2020 across the country for the same period under review.