Top five banks, led by Zenith with N2.6b, FBHoldings N2.1b
By Jeph Ajobaju, Chief Copy Editor
FUGAZ, acronym for Tier-1 banks, the five biggest by market capitalisation – FirstBank, United Bank for Africa (UBA), Guaranty Trust Bank (GTCo), Access Bank, and Zenith Bank – jointly paid N8 billion information technology tax in 2021.
The amount is gleaned from their individual financial results as their contributions to the National Technology Development Fund (NITDEF) mandated in the National Information Technology Development Agency (NITDA) ACT 2007.
The fund is to be disbursed by NITDA for the development of technology in Nigeria.
Payment by bank
The information technology tax each of the top five banks paid to the treasury in 2021 versus 2020 is as follows:
- Zenith Bank – N2.6 billion (up from N2.1 billion)
- FBN Holdings – N2.1 billion (up 377 per cent on N440 million)
- Guaranty Trust Bank – N1.7 billion (down from N2 billion)
- Access Bank – N1.06 billion (up 17.5 per cent on N909.9 million)
- UBA – N599 million (up 3.6 per cent on N578 million)
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Stipulations in the Act
Section 12(1) of the NITDA Act established the NITDEF.
Section 12(2) says: “There shall be paid and credited into the Fund established under subsection (1) of this section: (a) A levy of one per cent of the profit before tax of companies and enterprises enumerated in the Third Schedule to this Act with an annual turnover of Third Schedule N 100,000,000 and above and such paid by the companies shall be tax-deductible.”
Companies mandated to pay the tax listed the Third Schedule include
- GSM service providers and all telecommunications companies
- Cyber Companies and Internet service providers
- Non-IT companies such as Pensions Managers and pension-related companies;
- Banks and other Financial Institutions; and Insurance Companies
The Act mandates the Federal Inland Revenue Service (FIRS) to assess and collect the tax, according to reporting by Nairametrics.
It lays down penalty for default that “any company, agency or organisation that fails within two months after a demand note, to pay the levy or the import duty imposed under section 11 of this Act commits an offence and is liable on conviction to a fine of not less than N1,000,000.00 and the Chief Executive Officer of the company, Agency or Organisation shall be liable to be prosecuted and punished for the offence in like manner as if he had himself committed the offence, unless he proves that the act or omission constituting the offence took place without his knowledge, consent or connivance.”
