In Nigeria’s economic landscape, foreign firms’ tax payments surged by 44% to ₦2.57 trillion in the nine months to September 2024, according to the NBS.
Amidst currency devaluations and shrinking consumer spending, companies like Netflix and Google grapple with challenges while meeting rising tax obligations.
Foreign companies in Nigeria have significantly increased their tax contributions, with payments rising by 44% in the first nine months of 2024, according to the National Bureau of Statistics (NBS).
As a result, the Federal Government collected ₦2.57 trillion in Company Income Tax (CIT), up from ₦1.79 trillion during the same period in 2023.
Quarterly data shows mixed trends.
The government increased CIT revenue by 42.49% from ₦598.1 billion in Q1 to ₦1.12 trillion in Q2.
However, it dropped to ₦852.3 billion in Q3, reflecting tough economic conditions.
CIT imposes a 30% tax on corporate profits, while the Federal Inland Revenue Service (FIRS) collects Value Added Tax (VAT) at 7.5% on goods and services.
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Digital giants such as Google, Netflix, and Meta now pay digital taxes under Nigeria’s tax laws.
However, the naira’s devaluation hit their earnings, with some companies reporting losses.
Netflix, for example, reported reduced patronage as inflation weakened Nigerians’ purchasing power and forced many to cut discretionary spending.
In addition to CIT, the government sharply boosted VAT revenue, which rose by 157.03% to ₦1.28 trillion in nine months compared to ₦498.3 billion last year.
The government collected ₦435.7 billion in Q1, ₦395.7 billion in Q2, and ₦448.9 billion in Q3.
Altogether, foreign companies paid ₦3.85 trillion in CIT and VAT, marking a 68.1% increase from ₦2.29 trillion in 2023.
This surge underscores how foreign firms continue to play a vital role in supporting Nigeria’s economy despite challenging conditions
