The top 10 commercial banks listed on the Nigerian Exchange Limited (NGX) paid N260.3 billion in Company Income Tax (CIT) in 2022, a 28 percent increase over the N203.06 billion they paid in 2021.
This was disclosed in their audited financial accounts for 2022.
According to the audited accounts, Access Bank held (N14.7 billion), GTBank (N44.9 billion), UBA (N30.6 billion), and Zenith Bank (N60.7 billion) are the banks that received payment from the CIT. Ecobank (N79.88 billion), Stanbic IBTC (N19.5 billion), Union Bank (N1.6 billion), Fidelity Bank (N6.9 billion), Sterling Bank (N1.4 billion), and Unity Bank (N117.2 million) are some of the other financial institutions.
The hike in CIT came after the banks’ combined profit after tax, or PAT, increased by 7.11 percent year over year, or YoY, from N989.6 billion in 2022 to N1.06 trillion in 2022.
However, some banks recorded a YoY decline in profit after tax.
The CIT paid by the banks represents 10.7 percent of the total CIT generated into the Federation Account in 2022.
According to data from the Nigeria Bureau of Statistics, total CIT collections rose to N2.8 trillion in 2022 from N1.67 trillion in 2021, representing a 68 percent increase.
Despite the increase in CIT collections, analysts noted that the country’s tax-to-Gross Domestic Product, GDP, is still low, especially in view of the huge deficit spending of the Federal government.
Commenting, an analyst at FBNQuest Securities Limited, said: “Although the increase in the tax take is commendable, thanks to improvements in tax administration and collection efficiency, nevertheless, Nigeria’s tax revenue-to-GDP is low even when compared with sub-Saharan African peers.
“Nigeria’s non-oil revenue which stands at less than 5% of GDP compares less favorably with comparable tax revenue-to-GDP ratios for South Africa, Kenya, and Ghana with c. 23%, 14%, and 11%, respectively.
“Going forward, we expect the incoming administration to grow non-oil-related taxes by further broadening the tax base and improving on collection efficiency.”