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MTN Pays 35% of Its N155.8BN Q1 Profit as Tax



MTN Pays 35% of Its N155.8BN Q1 Profit as Tax

Telecoms giant, MTN Nigeria, has disclosed its unaudited financial report for the first quarter of 2023 in which it set new records across its key performance indices indicating positive growth and network expansion in the country.

The report indicated the continuous tax compliance culture of the mobile network operator (MNO) as it remitted more than one-third of its profit for the period as taxes to government agencies in the country.

Collectively, the company raked in N568.12 billion in revenue during the three months, indicating a 20.6% growth from N470.98 billion it posted in the first quarter of 2022.

The interim report further revealed that while MTN recorded N155.78 billion as Profit Before Tax (PBT) showing an 8.5% rise from N143.59 billion in the comparative quarter of 2022, it paid more than one-third, that is 34.97% of the amount to the government as taxes during the period.

Specifically, MTN’s tax obligations rose notably during the period by 16.5% from N46.77 billion in 2022 to N54.48 billion in 2023.

Consequently, the profit after tax (PAT) of the leading telecoms and digital service provider saw a weak bounce of 4.6% from N96.82 billion in 2022 to N101.3 billion in 2023 despite the double-digit growths in revenue and profit before tax.

Revenue Streams

MTN generated its revenue from various aspects of its operations including voice, data, digital, fintech and other service revenue.

The company raked in N222.61 billion from voice calls made by its customers on its network in the three-month period, 7.3% higher than N258.77 billion in Q1 of 2022. Data usage by its customers also skyrocketed by a whooping 40% from N162.73 billion in Q1 2022 to N227.84 billion in 2023.

Similarly, digital services offered by MTN generated N7.21 billion in 2023, rising significantly by 40% from N5.12 billion posted in the first three months on 2022.

The report further showed that its operations in the Fintech wing accrued N22.69 billion from January to March 2023. The figure is 8.6% higher than N20.89 billion relative to the comparative period of 2022.

Tax Compliance

Apart from deploying digital infrastructure and services that translate into digital and financial inclusion for Nigerians, MTN has become a major tax contributor into the coffers of the Nigerian governments.

The Federal Inland Revenue Service (FIRS) in 2022 applauded MTN Nigeria as the most tax compliant organisation and a top 20 taxpayer in Nigeria for the 2021 tax year.

These recognitions reflected MTN Nigeria’s remarkable performance in remittance of its taxes despite the challenges posed by the pandemic at the period.

Corroborating this, the telecom company said it paid N757 billion in direct and indirect tax to the Nigerian government agencies in 2021.

It said it paid N618.7 billion in direct and indirect taxes to the FIRS in the 2021 tax year, making it the largest single biggest contributor to taxes in Nigeria. Its contribution to all government agencies was 13.5% of FIRS’ total collection for the year.

A cursory look at the immediate past record of its audited financial report the full year 2022 also revealed that while the company posted N533.97 billion as profit before tax for the financial year, N32.79% of the amount equivalent to N175.1 billion was paid to the government as tax, leaving its profit after tax at N358.88 billion.

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