New Telegraph

CIT: Financial institutions boost payment to N1.1trn under Buhari

Banks and other financial institutions sector paid a total sum of N1.09 trillion as Company Income Tax (CIT) under the outgoing administration of Muhammadu Buhari from 2015 and 2022, according to

while Foreign CIT Payment contributed N399.98 billion. The report also states that “in terms of sectoral contributions, the top three largest shares in Q4 2022 were manufacturing with 31.20 per cent; Financial & insurance activities with 12.96 per cent and Information and communication activities with 12.77 per cent.

“Conversely, the Activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the least share with 0.01 per cent, followed by Water supply, sewerage, waste management, and remediation activities with 0.12 per cent; and Activities of extraterritorial organizations and bodies with 0.14 per cent.” Further analysis of the report indicates that the total amount of N208.93billion paid as CIT by banks and other financial institutions in 2022 is the highest recorded in the last eight years.

This also means that CIT generated by the sector has rebounded from the N96.40billion that it slumped to in 2020 due to the Covid-19 crisis, which negatively affected business for a lot of companies including banks and other financial institutions. Analysts note that this is the first time in the last three years that, in terms of sectorial contribution to the aggregate CIT, that the banks and other financial institutions sector is generating a higher amount than a rapidly expanding sector such as Information and Communication. For instance, in its CIT report for Q4’21, in which it stated that aggregate CIT for the period stood at N347.81billion, the NBS said: “In terms of sectoral contributions, the top three largest sharesinQ4’21wereInformation and Communication (N51.05 billion) with 19.72 per cent; Manufacturing (N45.09 billion) with 17.42 per cent; and Financial and Insurance activities (N31.06 billion) with 12.00 per cent.” In recent times, financial experts have been pointing out that despite the country’s sluggish economic growth and regulatory headwinds, Nigerian lenders continue to post good results. Indeed, according to the personal statements of members of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) at their meeting held in January, the various Financial Soundness Indicators (FSI) indicate that the banking system remains safe, sound, and resilient.

National Bureau of Statistics NBS) data. Specifically, New Telegraph’s analysis of NBS’ data including its CIT Q4’22 report released last Wednesday, shows that the sector generated N208.93 billion as CIT in 2022; N133.19 billiion in 2021; N96.40 billion in 2020; N142.69 billion in 2019; N140.08 billion in 2018; N137.72 billion in 2017; N123.91 billion in 2016 and N110.93 billion in 2015. CIT is a tax imposed on profit of a company from all sources. While resident companies are liable to CIT on their worldwide income, non-residents are subject to CIT on their Nigeria-source income. The CIT is fixed at the rate of 30 per cent for large companies (companies with gross turnover greater than N100 million), assessed on a preceding year basis (that is, tax is charged on profits for the accounting year ending in the year preceding assessment). According to the NBS’ CIT report for Q4’22, of the aggregate sum of N753.88 billion, generated as CIT for the period, local payments

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