Nigeria's revenue from foreign-related Value Added Tax (VAT) increased by 61% to N824.6 billion in 2023. In its recent release, the National Bureau of Statistics (NBS) disclosed that this represents a huge increase from N510.8 billion in 2022. According to the data released, the Corporate Income Tax (CIT) from foreign increased by 107%, moving from N1.14 trillion in 2022 to N2.38 trillion in 2023. While the increase in tax revenue is a huge boost, experts believe that this boost will not make a huge impact on the economy, as they suspect the weakening of the naira, which has increased the local currency’s value of foreign transactions for non-import (foreign) Value Added Tax (VAT) and Foreign Company Income Tax (CIT) payments.
In 2023, Nigeria's CIT increased by 73.14%, totaling N4.9 trillion. With nearly half of this amount or 49%, being ascribed to foreign CIT, this astounding growth highlights the substantial contribution of foreign businesses to the Nigerian economy.
However, the Value Added Tax (VAT) collected presented a somewhat different image. The effect of foreign companies on VAT was not as significant as it was in the CIT industry, although it was still significant. 23% of the total VAT collected in 2023, N3.64 trillion came from foreign sources.
