Nigeria: Dangote Cement becomes the biggest taxpayer of the federal government



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Dangote Cement Plc has become the highest corporate taxpayer and largest employer of labor in the country for the year 2020.

The cement maker ranked first among the top 100 elite companies listed on the Nigeria Exchange (NGX) by depositing a princely sum of 97.24 billion naira in the federal government vault during the year, while MTN Communication Nigeria Plc paid 93.6 billion naira and Guaranty Trust Bank (GTB) now known as Guaranty Trust Holding Company (GTCO) came in third with an income tax of 36.66 billion naira .

At the same time, the cement plant present in other African countries has also established itself as the company with the largest number of employees with a total workforce of 16,199 employees at the time of the performance appraisal.

In performance reviews of 100 leading elite companies on the Nigeria Exchange conducted by reputable business magazine ‘Next Money’, Dangote Cement was ranked as the most capitalized company in the country with N4173.22 billion. .

Despite the COVID-19 pandemic in 2020, the cement giant reported annual revenue of N1 trillion, the highest on record since its privatization nearly 20 years ago.

The company also reported pretax profit of just 373.3 billion naira and after-tax profit of 276 billion naira, its highest since 2018.

Nigeria, like most countries in the world, has faced a difficult 2020 due to the impact of COVID-19 on the economy, especially the private sector. However, mega-companies like Dangote Cement appear to have performed even better over the year.

The cement industry in general also appears to have performed well during the year.

Taxation is an important fiscal policy instrument available to governments to raise revenue and promote economic growth and development. Governments use tax revenues to carry out their traditional functions such as providing public goods and services; maintenance of public order; defense against external aggressions; and the regulation of commerce and business for social and economic sustenance.

Effective mobilization of tax revenues reduces an economy’s dependence on external flows, which have proven to be very volatile.

Taxation also allows governments greater flexibility in the design and control of their development program; conditions States to improve the environment for their national economic policy, thus creating an environment conducive to essential foreign direct investment; and strengthens the accountability links between governments and citizens.

At the same time, the global financial and economic crises of 2008/2009 provided useful lessons for countries on the need to pay more attention to domestic resource mobilization efforts, including by increasing tax revenues, and to forgo excessive dependence on external financial flows and export earnings.

Although tax structures vary widely from country to country, the primary goal of any tax structure is to achieve maximum revenue and economic growth with minimum distortions.

Different countries have different philosophies about taxation and different methods of collecting taxes. Likewise, countries have different uses of their income, which affect growth differently.

Speaking on the analysis, Next Money editor Mr. Ray Echebiri said that the performance index analysis of listed companies was carried out with the aim of establishing the top performers among the most of 150 of them.

Echebiri, a leading financial analyst, explained that the exercise is about providing existing and potential investors with information they can rely on when making investment decisions, saying, “The first step that we take in the analyzes is to extract the total assets of each of the listed companies from their audited accounts.

He said: “We sorted the total assets of the companies from largest to smallest and cut to 100th. Nigeria’s elite Top 100 Business Club is automatically a candidate for further ranking based on income, profits, market capitalization, number of employees and tax payment. “

Rankings, he said, show how listed companies fare on the corporate ladder when it comes to different performance indices. This edition of Nigeria’s 100 Best Companies covers fiscal year 2020. It is therefore an analysis of the performance of companies listed on the Nigerian Stock Exchange (NGX) on the basis of their audited accounts for the reference year. 2020.

“In other words, the information used in the analyzes is taken from the annual reports and accounts of the various companies published in 2020 whether the end of a company’s year is in March, June, September, December or any other month of 2020, “he stressed.

Echebiri further pointed out that the analyzes were limited to public companies in the country and the reason is that the accounts of listed companies are easier to access than those of private companies, adding “moreover, the accounts of public companies are more credible because they are generally subject to regulatory review and approval. ”

He explained that his group has no doubts that there are many private companies that could easily be among the top 100 companies in the country given the size of their balance sheets, the large revenues they post each year and the tempting profits. that they declare.

However, he added that they were not part of the performance review and analysis because their audited accounts do not undergo the kind of regulatory review and approval that listed companies face and, therefore, do not. are not as credible as those of publicly traded companies. – owned companies.

The analysis indicated that while Dangote cements with a market cap of N4173. 22 billion beat the rest of the companies listed on the Nigerian Stock Exchange (NGX) to become the company with the largest capitalization, MTN Communications Nigeria Plc and BUA Cement Plc, as of December 31, 2020, followed respectively by the second and third with market capitalization of 3,458 N. 23 billion and 2,619.41 N.

Dangote Cement paid the highest corporate tax in the year under review and was closely followed by MTN Communications Nigeria Plc which paid N93.66 billion corporate tax and Guaranty Trust Bank came third with a corporate tax payment of N36.66 billion.

Stakeholders noted that the contribution of the manufacturing sector to the tax was significant despite the effects of the COVID-19 pandemic, saying the manufacturing sector in Nigeria faces challenges such as infrastructure issues and a business environment. favorable, which must be unlocked to stimulate growth and create jobs.

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