Commercial Banks To Pay N103bn Taxes To FIRS

A total of 14 commercial banks listed on the Nigerian Stock Exchange are billed to pay N103 billion in taxes to the Federal Inland Revenue Service for the 2018 financial year.

An analysis of the recent financial statements filed by the banks on the NSE showed that Ecobank Transnational Incorporated will pay the highest amount of N33.61 billion.

A breakdown of the amount revealed that the tax liability was originally N35.076 billion, but a deferred tax asset of N1.46 billion was deducted from the amount.

Guaranty Trust Bank Plc has the second highest tax liability of N30.85 billion, followed by United Bank for Africa Plc, which reported a tax liability of N14.30 billion.

UBA listed its tax components to include N8.98 billion current tax, and N550 million Information Technology tax and a deferred tax of N5.32 million.

Stanbic IBTC Bank Plc reported a tax liability of N13.712 billion, followed by Zenith Bank Plc, which is to pay N4.052 billion minimum tax.

An analysis of the financial statement of Zenith Bank showed that the bank had a total tax liability of N26.63 billion, but was assessed based on the minimum tax rule because of a significant non-taxable income that resulted in a taxable loss for the bank. Zenith Bank said included in the total tax amount was N18.04 billion dividend tax for 2018 financial year, but it was liable to dividend tax of N25.43 billion, which represented 30 per cent of the N84.77 billion dividend paid as the Nigerian tax laws required companies to pay tax calculated at 30 per cent of the higher of taxable profit and dividend paid.

However, the total Company Income Tax payable based on minimum tax was N4.35 billion as the bank had tax paid in the prior year and tax credits amounting to N3.04 billion.

The difference between income tax payable assessed on dividend and income tax payable assessed on minimum tax amounted to N18.04 billion, which was charged as tax expense during the period.

Fidelity Bank Plc has a tax liability of N2.16 billion, made up of a current tax of N1.91 billion and IT tax of N251 million.

Access Bank Plc reported a tax payable of N1.65 billion, which comprised CIT of N4.37 billion, IT tax of N752.4 million and Capital Gains Tax of N17.8 millio, after which a deferred tax of N63.49 billion was deducted.

Wema Bank Plc is billed to pay a tax of N1.47 billion for the 2018 financial year, which can further be grouped into CIT of N351.8 million, National Information Technology Development Agency tax of N56.06 million, and a deferred tax of N1.063 billion.

Sterling Bank Plc reported a tax of N271 Million for the period, saying it paid N710 Million during the year.

It had a tax balance brought forward of N232m, a current tax charge of N173 Million, CIT of N173 Million and IT tax of N98 Million. Sterling Bank said the basis of its income tax for 2018 was 30 per cent of N575.808 Million, which was the value of the dividend paid to shareholders in 2018 and relating to the 2017 financial year.

First City Monument Bank Plc reported a tax liability of N123.3 Million, made up of N107.1 Million of dividend tax and N16.2 Million income tax.

It said all the provisions of the CITA that mandated a minimum tax assessment, where a taxpayer did not have any tax liability arising from its tax assessment, were applied.

As of the time of collating the results, Diamond Bank Plc, First Bank of Nigeria Limited, Union Bank Plc and Unity Bank Plc had yet to file their 2018 financial statements, so, their financial statements for the nine-months period ended September 30, 2018, were used.

Diamond Bank reported a tax of N398.4m, Union Bank reported N164m, Unity Bank reported N57.94m and First Bank reported N38m.

Union Bank said it was not liable to pay income tax as it recorded a tax loss for the period.