How FG generates N631.09bn tax from IT sector
TECHDIGEST – Consumers and firms operating in the Information and Communication space paid N631.09bn as tax in 2022, data from the National Bureau of Statistics has revealed.
This ranked IT as one of the biggest contributors to Value Added Tax and Company Income Tax in 2022.
Telecom consumers and other IT services consumers paid N268.84bn as consumption taxes for services like calls, SMS, data, and more, during the period under review.
Telecom companies and other IT companies paid N362.26bn as CIT. The government raked in a total of N5.34tn from CIT and VAT, of which the IT sector contributed 11.82 per cent.
According to the NBS, the IT sector is one of the major contributors to VAT and CIT.
It explained that the information and communication sector is composed of the activities of telecommunications and information services; publishing; motion picture, sound recording and music production and broadcasting.
In 2022, the telecoms sector contributed 82.17 per cent to the IT sector.
READ ALSO: NITDA, Uniccorn Sign MOU To Promote Indigenous Technologies
The NBS said: “In terms of sectoral contributions, the top three largest shares in Q4 2022 were manufacturing with 32.17 per cent; information and communication with 18.05 per cent and public administration and defence, compulsory social security with 9.87 per cent.”
For CIT, it stated, “In terms of sectoral contributions, the top three largest shares in Q4 2022 were manufacturing with 31.20 per cent; financial and insurance activities with 12.96 per cent, and Information and communication activities with 12.77 per cent.”
Read Also:
The growth of the digital economy led by the telecom subsector has spilled into increased revenue for the government.
In 2022, the sector contributed N12.32tn to real GDP and the total number of telecom subscriptions hit 222.23 million.
The growth of the sector has not been lost on the government, and with falling oil revenues, it has set out plans to ramp up taxes from the sector.
The government is currently adding a five per cent excise duty on telecom services, which will increase consumption tax from 7.5 per cent to 12.5 per cent, in a bid to increase its revenue.
While rejecting the Federal Government’s plan to increase the telecom consumption tax to 12.5 per cent, the Minister of Communications and Digital Economy, Isa Pantami, stated that the telecom sector was only one of the few sectors contributing to the economy.
He said, “The sectors that are contributing to our economy today are few. What we should be doing is ensuring that all other sectors can also contribute.
“A lot of sectors are consumers, these are the sectors that we should be tasked to contribute.
“A sector cannot be a consumer today; each sector must contribute a certain percentage to the economy. And if we fail to do that, we would be increasing the pressure and by doing that we would be destroying the digital economy sector.”
According to him, telecom firms pay about 41 different taxes in the country.
Listing the taxes in a report titled ‘Taxing Nigeria’s subnational economies to oblivion,’ SBM Intelligence said, “At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax; the Capital Gains Tax; Withholding Taxes; Stamp Duty; National Industrial Training Fund; Employees Compensation Scheme; the Tertiary Education Trust Fund; National Housing Fund contributions; Contributory Pension Schemes and customs duties.”
