Seven of Nigeria’s top commercial banks paid a combined N819.95 billion in income tax expenses in 2024, marking a 94.96 per cent increase from the N413.73 billion recorded in 2022.
The surge was largely driven by the introduction of a new Windfall Tax, which alone accounted for N223.27 billion or 27.23 per cent of the total tax burden.
The affected banks—FCMB, Fidelity Bank, GTCO, Stanbic IBTC, UBA, Wema Bank, and Zenith Bank—reported strong profitability, with pre-tax profits growing by 64.87 per cent year-on-year to N4.30 trillion in 2024, up from N2.61 trillion in 2023.
Post-tax profits also climbed by 58.68% to N3.48 trillion, according to data compiled from their audited financial results.
The significant rise in tax obligations follows the July 2024 enactment of the Windfall Tax Law, an amendment to Section 29A of the Finance Act, 2023. The law introduced a retrospective 70 per cent levy on foreign exchange gains from financial instruments, covering both 2023 and 2024.
This move followed the Central Bank of Nigeria’s currency floatation policy and aimed to capture extraordinary profits resulting from FX revaluation gains.
Zenith Bank – N293.96 billion
Zenith Bank reported the highest income tax expense at N293.96 billion, derived from a pre-tax profit of N1.33 trillion. The total includes a windfall tax of N63.31 billion (21.54% of its total tax expense).
Interestingly, despite its windfall tax payment, Zenith Bank recorded a foreign currency revaluation loss of N178.02 billion in 2024, contrasting with a gain of N228.98 billion in 2023.
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GTCO – N248.44 billion
Guaranty Trust Holding Company (GTCO) incurred a total tax expense of N248.44 billion, up a staggering 257% from N69.66 billion in 2023.
The figure includes a windfall tax provision of N51.25 billion, of which N23.7 billion is tied to 2023 earnings. GTCO’s strong performance was driven by robust net interest and non-interest income, resulting in a pre-tax profit of N1.27 trillion.
Fidelity Bank – N107.11 billion
Fidelity Bank reported an income tax expense of N107.11 billion from a pre-tax profit of N385.22 billion, up by a remarkable 210.01%.
The bank paid N13.33 billion in windfall tax, with N5.71 billion related to FX gains from the 2023 financial year. The windfall tax accounted for 12.46% of its overall tax burden.
Stanbic IBTC – N78.49 billion
Stanbic IBTC paid N78.49 billion in income tax, reflecting a 143% year-on-year increase. This amount includes a windfall tax of N17.18 billion (21.89% of total tax liability), stemming from a pre-tax profit of N303.80 billion.
The remainder was made up of N46.35 billion in current tax and N14.96 billion in deferred tax.
FCMB – N38.56 billion
First City Monument Bank (FCMB) reported N38.56 billion in tax payments, which is 34.4% of its pre-tax profit of N111.90 billion.
The figure includes N17.60 billion in windfall tax. FCMB’s foreign exchange gains declined by 56.56% to N36.47 billion, mostly from unrealised revaluations.
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UBA – N37.16 billion
United Bank for Africa (UBA) paid N37.16 billion in income tax, significantly down by 75.23% year-on-year. However, the bank also incurred a separate windfall tax liability of N57.91 billion, prompted by a spike in FX revaluation gains, which rose from N26.58 billion in 2023 to N292.09 billion in 2024. According to UBA’s audited report, this amount followed “a series of engagements and reconciliations with the FIRS.”
Wema Bank – N16.24 billion
Wema Bank recorded an income tax expense of N16.24 billion, a 148% increase from the previous year, based on a pre-tax profit of N102.52 billion—the lowest among the banks reviewed.
The bank paid N2.62 billion in windfall tax, accounting for 16.12% of its tax expense.
As of this report, Access Bank, FirstBank Holdings, and Sterling Bank are yet to publish their 2024 audited financials. Their eventual reports are expected to further shed light on the broader impact of the windfall tax across the banking sector.
While the windfall tax has bolstered government revenues, especially following the currency floatation policy, questions remain about its alignment with broader national priorities.
For instance, despite generating over N223 billion from the windfall levy, the combined contribution of these seven banks to the Nigeria Police Trust Fund was just N174 million, raising concerns about how fiscal policy supports security and public infrastructure.
Analysts suggest that while the tax regime has succeeded in curbing speculative FX gains and enhancing government revenue, it also risks dampening future investment in the financial sector if not carefully managed.
“The windfall tax serves as a revenue win for the government, but without clear reinvestment into national priorities like security, infrastructure, and economic diversification, it could lead to long-term policy credibility issues,” a Lagos-based economist commented.
As stakeholders await further fiscal updates and the pending audited results from other major lenders, the debate over fair taxation and sustainable economic development is set to intensify.