Zenith Bank, UBA, others pay N499b on income tax expenses

Seven Systematicaly Important Banks of the Central Bank of Nigeria have paid N499 billion on income tax expenses between 2011 and 2016
Financial institutions under the category of SIB include Zenith Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc, parent company of FBN Limited, FBN Holdings, United Bank For Africa Plc, Ecobank Nigeria and Diamond Bank Plc.
According to findings by LEADERSHIP, the above financial institutions in six years under consideration have reported an estimated N2.6 trillion profit before tax as a result of Assets Management Corporation of Nigeria acquisition of their non-performing loans and prudent management of customers’ deposit.
In the six years under consideration, Zenith Bank reported the highest profit before tax, while GTBank reported the highest tax income expenses.
Between 2011 and 2016, Zenith Bank generated N677.9 billion profit before tax and paid N99.5 billion as tax income expenses to revenue collection agencies.
Also, GTBank in six years had generated N674 billion profit before tax, while its tax income expenses hit N119 billion.
The breakdown revealed that in 2011, the above financial institutions paid N46 billion tax income expenses and it increased to N52 billion in 2012.
In 2013, the seven financial institutions tax income expenses rose by 53.9 per cent to N80.7 billion from N52 billion tax income expenses reported in the prior year.
The figure increased to N88 billion in 2014, but dropped to N71.8 billion in 2015 and crossed the N100 billion mark to N109.9 billion in 2016.
For profit before tax, the seven financial institutions had reported N188 billion in 2011; N477 billion in 2012; N471.6 billion in 2013; N551.8 billion in 2014; N459 billion in 2015; and N497 billion in 2016.
Nigerian banks tax income expenses continued to increase over the years in what analysts attributed to significant increase in profit before tax reported year-on-year.
Financial institutions operating in the country income tax expenses include Corporate Income Tax, National Information Technology Agency levy, Education Tax and Capital Gains Tax.
As mandated by law, Nigerian companies are charged 30 per cent CIT, based on profit earned in the year preceding assessment.
However, some above banks over the years have continued to default in the payment of Education Tax and National Information Technology Agency levy.
Stakeholders in the sector have said government needs to enforce financial institutions taxes compliance, stressing that a lot of loopholes needed to be fine-tuned to bridge the gap of tax contribution to Gross Domestic Product.
. Leadership newspaper.