• Business - Companies
  • Updated: November 21, 2023

Banks' income tax rises to N311 billion

Banks' income tax rises to N311 billion

Leading commercial banks in the Nigeria have reported 132.1 percent rise in tax remittances to government in the nine months (9M’23) of 2023.

During the period, the banks paid a total of N311.347 billion income tax, compared to the N134.127billion they paid during the corresponding period of 2022.

The financial statements of the banks filed with the Nigerian Exchange Limited recently, showed that banks’ profit before tax jumped 149.4 percent to N2.24 trillion from N898.9billion in the corresponding period of last year.

According to Vanguard, the banks include Zenith Bank Plc, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa (UBA) Plc, Access Bank Group, First Bank Nigeria Holdings, Stanbic IBTC Holdings Plc, Fidelity Bank Plc, Sterling Bank Group, Wema Bank Plc, Unity Bank, and Jaiz Bank Plc.

Under the prevailing tax laws of Nigeria, large corporations with a gross turnover of over N100 million are to pay a Company Income Tax rate of 30% on their profits to the Federal Government through the Federal Inland Revenue Service (FIRS).

Also, banks are mandated to pay other taxes, such as Education Tax, Police Trust Fund levy among others.

A breakdown of the tax remittances shows that Zenith Bank, paid the most income tax amounting to N70.864 billion in the 9M’23 compared with N28.218 billion in 9M’22,  followed by which paid N65.786 billion in 9M’23 compared to N39.375billion in 9M’22.

UBA reported N52.795 billion as against N22.451billion in 9M’22. Access Corporation occupied fourth position posting N43.972 billion in 9M’23 as against N10.289 billion in 9M’22 while First Bank Nigeria Holdings followed with N33.831billion as against N14.203billion in 9M’22.

Stanbic IBTC reported that its income tax expenses for the 9M’23 increased to N20.209 billion from N13.761billion in the preceding year while Fidelity Bank’s income tax expenses increased to N19.239 billion from N2.834 billion in 9M’22. Wema Bank’s income tax expenses stood at N2.876 billion as against N1.277 billion in 9M’22. It was followed by Sterling Bank Group posting N1.317 billion as against N 965 million in 9M’22.

JAIZ Bank's income tax expenses increased to N0.267 billion in 9M’23 from N577 million in the preceding period.

Unity Bank reported least income tax expense of N191million as against N177 million incurred by the lender in 2022.

Speaking on this development, analysts at FSL Securities Limited, said: “Although the increase in the tax payment is commendable, thanks to improvements in tax administration and collection efficiency, nevertheless, Nigeria’s tax revenue-to-GDP ratio is low even when compared with sub-Saharan African peers.

“Going forward, we expect the present administration to grow non-oil-related taxes by further broadening the tax base and improving on collection efficiency. Government should equally play its role by ensuring that it provides the essential infrastructure that would help the banks to make higher profit.”

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