The Federal Government of Nigeria is experiencing a remarkable boost in its finances, with revenue from Value Added Tax (VAT) and Company Income Tax (CIT) rising by 85% year-on-year to N6.44 trillion in the first half of 2024 (H1’24). This marks a substantial increase from N3.48 trillion collected during the same period last year (H1’23).
This surge in revenue is bolstered by significant contributions from the country’s leading commercial banks, which collectively paid N579.38 billion in income tax for H1’24.
This figure represents a remarkable 109.6% increase compared to N276.39 billion in H1’23. A detailed analysis of the banks’ financial statements reveals that Zenith Bank topped the list with a tax payment of N149.03 billion, followed closely by Ecobank at N132.5 billion and Guaranty Trust Bank at N98.2 billion.
Other notable contributors included Access Bank (N67.6 billion), United Bank for Africa (N51.06 billion), and Stanbic IBTC (N30.64 billion). Additionally, First Bank of Nigeria contributed N21.4 billion, Fidelity Bank paid N19.6 billion, and smaller banks such as First City Monument Bank, Wema Bank, and Sterling Bank contributed lesser amounts.
This unprecedented rise in tax revenue is a positive sign for Nigeria’s economy, as it suggests improved compliance and a strengthening of the tax base. The increase in VAT and CIT revenues could provide the government with much-needed funds to address critical infrastructure projects and social programs, enhancing the overall economic outlook.
Analysts suggest that the government’s focus on tax reforms and compliance measures is beginning to yield positive results. However, they caution that sustaining this growth will require continued efforts to improve the efficiency of tax collection and broaden the tax net.
As Nigeria looks to strengthen its fiscal position, the impressive revenue figures from VAT and CIT offer a hopeful glimpse into the country’s financial future.
