CIT in mining sector grows 36,203.8%

Growth in Company Income Tax (CIT) has suggested recovery in activities across various sectors. Specifically, CIT realized from the mining sector rose astronomically by 36,203.8 per cent quarter-on-quarter ( q/q) to N12.5 billion, the highest quarterly amount since the Nigerian Bureau of Statistics (NBS) began tracking CIT payment by sectors.

“We attribute this to the recent wave of reforms in the mining sector, which led to it outperforming budgeted revenue by 110.1 per cent in 2020 (to N2.1 billion)”, said analysts at Afrinvest.

According to the Company Income Tax (CIT) data for the second quarter of :2021 published by the NBS last week, gross CIT realized by the FG grew 20.2 per cent q/q (or 17.4 per cent year-on-year (y/y) to print at N472.1 billion. This holds positive for FG’s non-oil revenue projection in 2021, given that the segment already attained a 99.7 per cent pro-rated target in the 5-months between January and May.

Relative to first quarter of 2021 (with 11 sectors), 18 of the 28 activity sectors recorded growth in CIT payment, led by Professional Services (up 616.0 per cent q/q to N130.1 billion), Other Manufacturing (up 436.9 per cent q/q to N87.3 billion), Banks & Financial Institutions (up 548.3 per cent q/q to N60.0 billion), and Commerce & Trading (up 75.2 per cent q/q to N23.7 billion) with a combined share of 72.1 per cent of the total CIT.

On the low side, the Petrochemical & Petroleum refineries, and the Breweries, Bottling & Beverages activity sectors reported the highest quarterly decline in CIT – down 84.8 per cent (to N84.6 million) and 69.3 per cent (to N7.1 billion) respectively.

“We attribute the reduction in CIT from Petrochemical & Petroleum refineries to the zero productivity of Nigeria’s three refineries over this period. However, we believe the reduction in the Breweries, Bottling & Beverages activity sector CIT was jointly due to inflation-induced weak consumer purchasing power and the reduction of alcohol consumption during Ramadan in April and May 2021”, said Afrinvest.