NBS’ N9.25bn Figure At Variance With Banks’ Q1 2021 Income Tax
The National Bureau of Statistics (NBS) has understated the company income tax paid by the banking industry in the first quarter of the year, computing a paltry N9,255.990,682.37 for the entire financial services sector, a figure far lower than the payment by six operators in the banking industry.
Analysis of the first-quarter results of six banks alone shows they paid a total of N39.69 billion CIT to the Federal Inland Revenue Service (FIRS) for the period reviewed by the NBS.
The nation’s statistics agency in its last Wednesday report on CIT stated that a total of N392.77 billion was generated by the Federal Inland Revenue Services (FIRS) between January and March 2021, noting that it was higher than the N295.72 billion generated in the fourth quarter of 2020 and N295.68 of the first quarter of 2020 representing a 32.82 percent increase in Quarter-on-Quarter and 32.84 percent increase Year-on-Year.
The NBS report notes that of the total figure, the Breweries, Bottling, and Beverages accounted for the highest amount of CIT, second only to Professional Services and Telecoms which generated N18.17 billion. It also added that MDAs generated N17.35 billion as against N13.49 billion ascribed to the textile industries.
“Breweries, Bottling, and Beverages generated N23.26 billion, the highest CIT for the quarter and closely followed by Professional Services, including Telecoms which generated N18.17bn. State Ministries & Parastatals generated N17.35bn while Textile and Garment Industry generated the least and closely followed by Mining and Automobiles and Assemblies with N13.49m, N34.40m and N73.57m generated respectively.
“Out of the total amount generated in Q1 2021, N152.33bn was generated as CIT locally while N184.59bn was generated as foreign CIT payment’, according to the NBS which stated that “The balance of N55.85bn was generated as CIT from other payments”.
InsideBusinessNG’s computations however show that the NBS understated the CIT from the financial services sector that consists of banks, insurance companies, and others. Efforts to reach the NBS for clarification were unsuccessful as the Statistician-General, Yemi Kale is said to be unavailable.
Using the first quarter results of operators in the banking system as a basis, the Six Tier-1 banks alone, comprising Zenith Bank Plc, Access Bank Plc, First Bank of Nigeria Holding, Guaranty Trust Bank (GTB), United Bank for Africa (UBA) Plc and Ecobank Transnational Incorporated (ETI) altogether paid N39.69 billion CIT, slightly over the 10 per cent of total CIT reported by the NBS. The figure is N30 billion above the figure of N9,255,990,682.37 declared by the NBS for the entire financial services sector.
The N39.69 billion CIT paid by the six banks represents an increase of 2.71 percent over N38.64 billion paid in the corresponding quarter of the previous year.
Breakdown of the N39.69 billion total tax paid by these top banks shows that Ecobank led the table with a share of 26.1 percent, followed by GTB with 20.93 percent, Zenith Bank came next with 20.05 percent, while Access Bank finished with 18.89 percent. FBN Holdings and UBA Group completed the park with 8.26 and 6.09 percent respectively.
Ecobank with a declared profit of N29.963 billion in Q1 2021 paid the biggest income tax of N10.379 billion, representing 19.12 percent increase over N8.713 billion paid in Q1 2020. The pan African Bank with a customer deposits of N7.378 trillion has its total Assets standing at N10.433 trillion.
Guaranty Trust Bank came next in the tax ranking, with the Orange brand paying N8.136 billion in taxes in the period under review, with a slight decline of 0.01 percent from the N8.137 billion paid to the FIRS in Q1 2020. Its total assets according to its 2021 first quarter Financials, closed at N4,992 trillion, while its customers deposits stand at N3.604 trillion, having posted a profit after tax (PAT) of N45.546 billion.
Zenith Bank with a huge profit of N53.060 billion in the first three months of 2021, paid N7.962 billion in tax expenses, a 3.63 percent drop from N8.262 billion in Q1 2020. The Q1 2021 report shows Zenith Bank’s earnings fell to N157. 309 billion from N166. 814 billion year on year, while total assets as at the period was N8.682 trillion and Customers deposits closed the quarter at N5.674 trillion.
The tax records of the top Nigerian banks also saw Access Bank coughing out N7.503 billion in taxes to the government, representing an increase of 39.87 per cent from N5. 364 billion of the corresponding year. The Herbert Wigwe managed financial institution declared a profit of N52. 54 billion, while total assets and customers deposit closed the period at N9.054 trillion and N5.684 trillion.
Checking the tax sheet of FBN Holdings, shows the holding company of First Bank of Nigeria Limited spent N3.285 billion in taxes, a sharp 40.7 percent decrease from the N5.540 billion it paid to tax authorities in Q1 2020.
The Bank which was recently in collision with the Central Bank of Nigeria (CBN) regarding its corporate governance dealings declared a profit after tax of N15.621 billion and reported a total assets of N7.835 trillion, while the first generation bank maintains a customers’ deposit of N5.096 trillion.
The Tier – 1 banks’ tax records was completed by United Bank for Africa Plc, which paid N2. 426 billion to the government down from N2.625 billion it paid in Q1 2020, a 7.6 percent drop. The Group with a profit after tax of N38.155 billion, also declared a Gross Earnings of N155.4 billion up from N147.2 billion, while Total Assets are at N7.892 trillion and customers Deposits remaining at N5.788 trillion.
Further checks revealed that the N39.69 billion company’s income tax paid by these Tier -1 Financial institutions for the first quarter of the year represents 5.82 percent of the N681 billion total Federal government projection for Company Income Tax (CIT) for the year.
According to the 2021 Appropriation Act, the federal government significantly adjusted the Company Income Tax (CIT) with the projections of the FG’s share declining by 17.15 percent from N822 billion in 2020 to N681bn in 2021 owing to the contractions in the ecnomy occasioned by Covid pandemic and other challenges.
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