Ten commercial banks that are listed on the Nigerian Exchange Limited (NGX) collectively paid N260.3 billion in company income tax (CIT) in 2022, a 28 percent increase from the N203.06 billion they paid in 2021.
This information was provided by the banks in their 2022 audited financial statements.
The banks that received payment from the CIT are Zenith Bank (N60.7 billion), Access Bank (N14.7 billion), GTBank (N44.9 billion), and UBA (N30.6 billion). Additional financial institutions include 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 hike in CIT came after the banks’ combined profit after tax, or PAT, increased by 7.11 percent year over year (YoY), from N989.6 billion in 2021 to N1.06 trillion in 2022.
However, the profit after tax for some banks fell year over year.
10.7% of the total CIT generated into the Federation Account in 2022 will be made up of CIT paid by banks.
The overall CIT revenues increased by 68% from N1.67 trillion in 2021 to N2.8 trillion in 2022, according to data from the Nigeria Bureau of Statistics.
Analysts remarked that despite an increase in CIT revenues, the country’s tax-to-Gross Domestic Product (GDP) ratio is still low, particularly in light of the Federal government’s massive deficit expenditures.
Analysts from FBNQuest Securities Limited commented, saying: “Nigeria’s tax revenue-to-GDP is low especially when compared with sub-Saharan African rivals, despite the growth in tax take being laudable due to improvements in tax administration and collection efficiency.
In comparison to comparable tax income-to-GDP ratios for South Africa, Kenya, and Ghana with c. 23%, 14%, and 11%, respectively, Nigeria’s non-oil revenue, which is less than 5% of GDP, is less favorable.
Going forward, we anticipate the new administration to increase non-oil-related taxes by expanding the tax base and enhancing tax collection effectiveness.
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