Compay Income and Performance of Deposit Money Banks

Evidence from Selected Banks in Nigeria

Abstract

This study examined the impact of corporate taxation on the financial performance of deposit money banks in Nigeria from 2011 to 2020. The specific objectives of the study were to determine the impact of company income tax (CIT) and national information technology levy (NITDL) on the profit of deposit money banks in Nigeria. A sample consisting of 7 deposit money banks and cross sectional data were obtained from their annual reports and financial statements were used for the analysis. The econometric of analysis was Autoregressive Lag Modelling (ARDL) approach, informed by a mixed order of integration of the variables. The findings indicate that- in the short run, CIT was not only significant, but exerted a positive impact on profit for the year of deposit money banks; while in the long run, it exerted insignificant and positive impact. It also revealed that NITDL had positive and significant impact on profit for the year of deposit money banks both in short and long run. In view of these findings, the study recommends that the monetary authorities should review the countries’ fiscal policy to grant tax incentives to deposit money banks. This will surely increase the impact on profit for the year of deposit money banks in the long run. Again, the banks should pay their national information technology levy as at and when due, being the highest beneficiaries from information technology. This will enhance the impact of developments in information technology on the profit for the year of deposit money banks in Nigeria.