- The banking sector in Nigeria becomes a major tax contributor in the country
Nigeria Income Tax has shown resilience as dominating Nigerian Banks such as GTB, Access Bank, Zenith Bank, UBA, and so on, remitted a whopping ₦75.4 billion in Company Income Tax (CIT) in the first half of the year (H1’22), a 35% increase over the ₦55.67 billion remitted in in the first half of 2021 (H1’21).
Guaranty Trust Bank (GTB) took the lead with ₦25.6 billion, followed by Zenith Bank which paid ₦18.59 billion, United Bank for Africa (UBA) with ₦15.4 billion, Access Bank with ₦9.05 billion, Fidelity Bank with ₦1.7 billion.
Other include; Stanbic IBTC with ₦1.19 billion, Wema Bank with ₦827.59 million, Sterling Bank with ₦606 million, Union Bank with ₦582 million, and Unity Bank with ₦147.6 million, among the others.
According to the financial report that the banks presented to the Nigerian Exchange Limited (NGX), GTB had the highest Year-on-Year (YoY) growth rate in CIT, at 88%.
Meanwhile, the Federal Government’s tax revenue increased by 31% in H1’22 to ₦2.44 trillion from ₦1.86 trillion in H1’21. The CIT and VAT are the government’s primary non-oil revenue sources.
The VAT and CIT data published by the National Bureau of Statistics (NBS) for the first and second quarters (Q1 and Q2) of 2022 disclosed that CIT rose at a faster rate of 45.7% compared to 18% growth in VAT during the review period.
The data also revealed that CIT rose from ₦864.77 billion in H1’21 to ₦1.26 trillion in H1’22.
The Bureau mentioned that VAT revenue rose from N1 trillion in H1’21 to ₦1.18 trillion in H1’22, and the financial sector was one of the biggest contributors to CIT during the period in terms of sectoral contributions.
What is NBS?
The National Bureau of Statistics (NBS) is an official office of the Nigerian government that provides statistical information on the country.
The site provides its information through customized reports, an online data analysis tool, information by state, a press center, and a data portal.
Nigeria Income Tax: More on CIT
Company Income Tax (CIT) is a direct tax imposed on the income or capital of corporations.
Many countries inflict such taxes at the national level, and a synonymous tax may be imposed at the state or local levels. The taxes may also be referred to as income tax or capital tax.
A country’s CIT may apply to:
- Corporations incorporated in the country;
- Corporations trading in the country on income from that country;
- Foreign corporations who retain a permanent establishment in the country; or
- Corporations are considered to be residents for tax purposes in the country.
What is VAT?
Value Added Tax is the type of tax imposed on the price of a product or service at each stage of production, distribution, or sale to the end consumer.
If the final consumer is a business that receives and pays the government VAT on its products or services, it can reclaim the tax paid.
VAT is an indirect tax because the person who eventually carries the burden of the tax is not necessarily the same as the one who remits the tax to the tax authorities.
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