Nigeria’s N1.36trn non-oil revenue in Q3 not enough – Dr. Nevin

Lead economist at PricewaterhouseCoopers (PwC), Dr. Andrew Nevin has noted that the N1.36 trillion generated from non-oil sectors of the Nigerian economy between July and September 2019 as disclosed by the Central Bank of Nigeria (CBN) is not enough.

Dr. Nevin who took to his twitter handle @nevinomics to react to the development, pointed out that that it was inappropriate to suggest that N1.3 trillion is a whooping sum considering that it’s less than 4% of the country’s GDP.

He noted that until the public sector begins to deliver services, the Nigerian public will continue to shy away from paying tax.

“This is <4% of GDP … still not good enough … and increasing very slowly when we consider inflation,” he said.

“The fundamental issue is if Nigerian public sector does not deliver services, the Nigerian public will not want to be in the formal, tax-paying sector.”

The CBN had disclosed in a report on Monday that the country generated N1.36 trillion from corporate tax among others as oil revenue dropped in the third quarter of the year.

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The apex bank’s report showed that the non-oil revenue generated in the quarter rose above the quarterly budget of N1.34 trillion, a surplus of 1.4%. It said the country’s non-oil revenue rose by 16.2% when compared to the sum of N1.17 trillion recorded in the third quarter of 2018.

The components of Nigeria’s non-oil revenue include Value Added Tax (VAT), Corporate Tax, Customs and Excise Duties and Other sources, among which corporate tax accounted for the lion share.

The bank’s data showed that at the end of September 2019, Nigeria generated N651.43 billion from corporate tax. It further showed that in the last one year, revenue generated from corporate tax rose by N140.64 billion.

Also, the sum of N290.87 billion revenue was generated from VAT within the period, while N210.77 billion was generated from customs and excise duties.

The apex bank said the higher non-oil revenue, relative to the quarterly budget was as a result of increased receipts from Corporate Taxes, and improvements in the collection of the Nigeria Customs Service.

On the flip side, gross oil revenue fell below both the budget target and receipt in the preceding month. In the third quarter, Nigeria generated N1.34 trillion gross oil revenue, representing 49.6% of the total revenue collected by the government.

Also, the oil revenue received was 4% lower than the revenue recorded in the corresponding period of 2018. In Q3 2018, Nigeria generated the sum N1.39 trillion as against N1.34 in Q3 2019. The breakdown shows crude oil Petroleum Profit Tax (PPT) accounted for N947.53 billion to the total revenue, others (N335.26 billion) and crude oil sales (N57.28 billion).

The CBN stated that the decline in oil revenue, relative to the quarterly budget was due largely to shortfalls in all the components of oil revenue, except Domestic Crude Oil and Gas sales.