The top 30 companies listed on the Nigerian Stock Exchange paid a total of N141.4 billion as taxes between January and March 2021. This is according to data compiled by Nairametrics Research from the financials of the listed firms.
The most liquid and capitalized firms, collectively recorded a surge of 18.3% in income-tax payments, from N119.59 billion as of Q1 2020 to N141.43 billion in 2021. This translates to a nominal increase of N21.84 billion in tax payments during the review period.
A cursory review of the 30 companies during the aforementioned period showed that:
- 17 firms (56.7%) recorded an increase in the amount they paid as tax.
- 12 others (36.7%) recorded a cut, that is, a decline in the amount they paid as tax.
- 11 Plc (formerly Mobil) paid the same amount as tax during the period under review, hence closing flat.
- Flour Mills Nigeria Plc is yet to release its Q1 2021 results.
The Federal Government expects to rely on collecting more taxes to boost its revenue profile. In 2020 the Federal Inland revenue collected total taxes of N4.69 trillion divided into oil and non-oil taxes. A total of N1.5 trillion was from oil taxes down from N2.1 trillion recorded in 2019.
Nigeria remains one of the poor performing countries when it comes to tax to GDP ratio, collecting less than 3% of GDP as taxes.
To ensure tax revenues remain robust in 2021 corporates like those listed on the NSE 30 will have to generate higher taxable profits if the government is to increase its tax revenues. The FIRS will likely be more aggressive in its attempt to collect taxes from the informal market, which remains far from contributing the right amount of taxes required to fund government expenditure.