BREAKING - FUGAZ pay N8 billion as information technology tax in 2021
The top five biggest banks in Nigeria by market capitalisation, FBN Holdings, UBAPlc, Guaranty Trust Bank, Access Bank, and Zenith Bank (FUGAZ), paid N8 billion as information technology tax in 2021. The banks disclosed this in their respective financial results for the year.
The tax is paid as a contribution to the National Technology Development Fund (NITDEF) as mandated by the National Information Technology Development Agency (NITDA) ACT 2007.
According to the government, the fund is to be disbursed by NITDA for the development of technology in Nigeria.
What each bank paid
- A breakdown of the payments by the banks in 2021 shows that Zenith Bank contributed the highest amount to the technology fund out of the top five banks. The Bank paid N2.6 billion, which surpassed the N2.1 billion it paid in 2020.
- FBN Holdings also paid N2.1 billion in 2021. This represents a 377% increase in payment compared with the N440 million the bank paid in 2020.
- Guaranty Trust Bank contributed N1.7 billion to the fund last year. This was, however, lower than the N2 billion it paid into NITDEF in 2020.
- Access Bank’s financial result shows that the company paid N1.06 billion in the year under review, thus increasing its contribution by 17.5% compared with the N909.9 million it paid in 2020.
- United Bank for Africa (UBA) paid N599 million in 2021, a 3.6% increase over the N578 million it paid in 2020.
What you should know
- Section 12 (1) of the National Information Technology Development Agency (NITDA) ACT 2007 established the National Information Technology Development Fund while subsection two states that “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 levy as stated in the ‘third schedule’ include GSM service providers and all telecommunications companies; Cyber Companies and Internet service providers; it also includes non-IT companies such as Pensions Managers and pension-related companies; Banks and other Financial Institutions; and Insurance Companies.
- As stipulated by the Act, the Federal Inland Revenue Service (FIRS) is to assess and collect the levy imposed.
- The Act also lay down punishment in case of default stating 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 N 1,000,000.00 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”.
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