Top 10 banks pay N260.3bn as income tax

The top ten commercial banks listed on the Nigerian Exchange Limited (NGX) paid N260.3 billion as Company income tax (CIT) in 2022, representing a 28 percent increase over the N203.06 billion they paid in 2021.

The banks disclosed this in their audited financial statements for 2022.

The banks and the CIT paid are Access Bank (N14.7 billion), GTBank (N44.9 billion), UBA (N30.6 billion) and Zenith Bank (N60.7 billion). Others are 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),

The increase in CIT followed a 7.11 per cent year-on-year, YoY increase in the combined profit after tax, PAT of the banks, to N1.06 trillion in 2022 from N989.6 billion in 2021.

However some banks recorded a YoY decline in profit after tax.

The CIT paid by the banks represents 10.7 per cent 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 per cent 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, analysts 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 favourably 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.”