Dangote Cement and 13 other companies listed on the Nigerian Exchange Limited (NGX) to remit a total tax of N289.4billion to the Federal Inland Revenue Service (FIRS) and other agencies in first half of 2021.
Aside paying the statutory 30 per cent income tax, companies operating in the country are meant to pay Education tax, National Information Technology Development Agency (NITDA) tax and Nigeria Police Trust Fund levy.
Analysis of the companies results revealed that Dangote Cement, followed by MTN Nigeria Plc are the most tax paying companies in the country, while Ecobank Transnational Incorporated (ETI) leads the banking sector in tax expenses during the period.
Dangote Cement, followed by MTN Nigeria had emerged as the highest income taxpayer in the country last year.
The foremost indigenous cement manufacturer came first among top 100 elite companies listed on the NGX posting into the coffer of the federal government a princely sum of N97.24billion in 2020, while MTN Nigeria paid N93.6billion.
Also, United Bank for Africa (UBA) with branches in 20 African countries, United States of America, United Kingdom and France came second in the category of bank with highest tax expenses in first half of 2021, followed by Guaranty Trust Holdings Company Plc (GTCO).
The breakdown revealed that Dangote Cement in H1 2021 reported tax expenses of N89.62billion, an increase of 144 per cent from N36.71billion remitted to FIRS, among other revenue generating agencies.
From MTN Nigeria’s profit & loss figures, it reported tax expenses of N73.29billion in H1 2021, 64 per cent increase from N44.69billion reported in H1 2020.
However, ETI’s tax expenses grew by 45 per cent to N23.4billion in H1 2021 from N16.08billion reported in H1 2020, while UBA’s tax expenses closed H1 2021 at N15.061billion from N12.7billion in H1 2020.
With decline in profit, GTCO reported 12 per cent decline in tax expenses to N13.64billion in H1 2021 from N15.44billion in H1 2020.
Access Bank reported N10.56illion tax expenses in H1 2021 from N13.27billion in H1 2020 as Zenith Bank Plc reported N10.94billion tax income in H1 2021, 6.2 per cent increase from N10.3billion in H1 2020.
On its part, FBN Holdings reported N7.15billion tax expenses in H1 2021, 24 per cent increase over N5.77billion in H1 2020.
In the Fast-moving Consumer Goods (FCMG) category, Nestle Nigeria plc reported tax expenses to N11.65billion in H1 2021, about 3.2 per cent decline from N12.04billion reported in H1 2020.
Seplat Energy Plc made the group of 14 companies with N10.11billion tax expenses in H1 2021 as against tax income of N12.06billion recorded in H1 2021.
Nigerian Breweries Plc and Guinness Nigeria Plc tax expenses in H1 2021 was N4.2billion and N4.5billion respectively.
In addition, Lafarge Africa Plc tax expenses grew significantly by 55 per cent to N8.43billion in H1 2021 from N5.4billion in H1 2020, while BUA Cement’s recorded N6.3billion tax expenses in H1 2021, 45 per cent increase from N4.35billion recorded in H1 2020.
Analysts have expressed that listing on the NGX, means companies must be transparent in tax payment to government agencies where they operate.
They hinted that, joining elite companies on the NGX means failure to pay might force government to shut operations, leading to job losses.
A tax expert at a PwC Nigeria, Mr. Taiwo Oyedele, in a chat with THISDAY noted that companies tax remitted to government are meant to facilitate economy growth.
According to him, taxes paid by companies are based on laws and regulations, stressing that banks, among others are meant to play by the rules which has to do with full disclosure.
He explained further that a good number income that companies generated are exempted from tax.
According to the Chief Economist/Head, Investment Research, PanAfrican Capital Holdings, Moses Ojo, financial institutions are operating under CAMA that mandated 30 per cent payment of the CIT, two per cent as Education tax.
“These taxes are remitted to the federal government. The only tax that goes to the state government is PAYE.”
On economy development, he said that: “companies’ income tax contributed significantly to budget finance of the federal and state government for.”
The Vice-President, Highcap Securities Limited, Mr. David Adnori said that these companies on the NGX over the years maintained stronger profit, which is meant to contribute to government tax revenue.
He expressed that most companies that were reluctant to come to the stock market were hiding their financials or were scared of take-over by wealthy Nigerians.
According to him, “Once the government can work together with the FIRS to enforce tax laws, there would be no hiding place for companies. Thus, they will be forced to come to the market.”
Early this month, the publisher of Next Money, Mr. Ray Echebiri had said listed companies stand on the corporate ladder with regards to the various performance indices.
He noted that: “Any company that makes it to the corporate elite club of Nigeria’s Top 100 Companies is automatically a candidate for further ranking by Revenues, Profits, Market Capitalization, Number of Employees and Tax Payment.”