In the first quarter of 2024 (Q1’24), eight commercial banks in Nigeria collectively paid a total of N200.19 billion in income tax, marking a significant 203.7 percent year-on-year increase compared to the N65.91 billion tax paid in Q1’23.
The contributing banks include Guaranty Trust Bank (GTB), Zenith Bank, Access Bank, Fidelity Bank, Stanbic IBTC, United Bank for Africa (UBA), First City Monument Bank (FCMB), and Wema Bank. This increase in tax payments indicates growth in profitability, with the banks reporting a combined profit before tax (PBT) of N1.33 trillion, representing a 355 percent increase from the that in 2023.
The tax-to-profit ratio for these banks stood at 15.04 percent. This is a significant contribution of the banking sector to government revenue through the Company Income Tax (CIT). According to the Federal Inland Revenue Service (FIRS), CIT is levied at a rate of 30 percent on a company’s total profit from all sources. However, certain profits exempted from CIT are those not derived from trade or business activities conducted by the company, such as those from cooperative societies.
Source: Vanguard