The latest recent data from the National Bureau of Statistics (NBS) shows that in 2023, Nigeria’s revenue from foreign-related Value Added Tax (VAT) climbed by 61% to N824.6 billion. Compared to N510.8 billion in 2022, this is a significant increase. From the data, there was a remarkable increase in Corporate Income Tax (CIT) from foreign entities—from N1.14 trillion in 2022 to N2.38 trillion in 2023—a 107% increase.
While the increase in tax revenue is a welcome development for the country’s finances, experts believe otherwise, thereby highlighting the Nigerian economy’s exposure to exchange rate risks.
According to reports, Nigeria collected N4.9 trillion in Company Income Tax (CIT) in 2023, a 73.14% increase in revenue. This impressive increase highlights the substantial impact that foreign companies have on the Nigerian economy; foreign CIT accounts for approximately half of this amount or 49%.
Although, the Value Added Tax (VAT) collections painted a slightly different picture. While still noteworthy, the impact of foreign firms on VAT was less pronounced than in the CIT sector. Foreign entities contributed 23% to the total VAT collections, which stood at N3.64 trillion for 2023.