Nigeria’s tier-1 banks pay N29.8 billion worth of taxes in Q1 2020
In Q1 2020, Nigeria’s tier-1 banks –FBN Holdings Plc, United Bank for Africa Plc, Guaranty Trust Bank Plc, Access Bank Plc, and Zenith Bank Plc (FUGAZ) – collectively paid the sum of N29.8 billion as company income tax to the Federal Inland Revenue Service (FIRS).
The details: A breakdown of the tax payments, according to checks by Nairametrics Research, shows how the most profitable banks during the first quarter of the year also paid the most taxes.
For instance, Zenith Bank, which reported the largest profit of N50.1 billion in Q1 2020, also paid the most tax of N8.3 billion. This is followed by Guaranty Trust Bank Plc which paid total tax of N8.1 billion to the FIRS, thereby reporting a profit after of N50.1 billion.
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Note that FBN Holdings Plc, which paid out N5.5 billion worth of company income tax in Q1 2020, is the holding company for First Bank of Nigeria Limited and a slew of other subsidiaries. What this means, therefore, is that the N5.5 billion tax encompasses all the group of companies under the Hold-Co.
See the embedded tweet below for a full glance of how much taxes the tier-1 banks paid during the period under review.
In the meantime, there are strong indications that these tier-1 banks and others may enjoy tax exemptions in Q2 2020. This possible tax holiday (for tier-1 banks and others) is owing to the fact that they recently donated billions to facilitate the fight against the COVID-19 pandemic.
Some Nigerian companies have often enjoyed tax holiday, an arrangement whereby the Federal Government either reduces or completely eliminates taxes for select companies. A Nigerian company can also get a tax credit, which basically has to do with the sum total that can be offset against such a company’s tax liability after it must have carried out a project on behalf of the government.