Dangote Cement Plc has been adjudged the highest corporate income taxpayer and biggest employer of labour in the country for the year 2020.
This followed a performance analyses of 100 top elite corporate bodies on the Nigeria Exchange carried out by Frontline business magazine, ‘Next Money.’ Dangote Cement was ranked the most capitalised company in the country with N4,173.22 billion.
Publisher of Next Money, Mr Ray Echebiri said the performance index analysis of companies listed on the Exchange was carried out with a view to establishing the best performing ones among the over 150 of them.
Despite the COVID-19 pandemic in 2020, the cement giant reported full-year revenue of N1 trillion, the highest it has ever recorded since it was privatised almost 20 years ago.
The cement manufacturer came first among top 100 elite companies listed on the Nigeria Exchange (NGX) posting into the coffers of the federal government a princely sum of N97.24 billion in the year, while MTN Communication Nigeria Plc paid N93.6 billion and Guaranty Trust Bank (GTB) now known as Guaranty Trust Holding Company (GTCO) came third with an income tax of N36.66billion.
Dangote, the cement company with presence in other African countries also emerged as the company with the highest number of employees with a total number of 16,199 staffers on its payroll as at the time of performance review.
The company also reported a profit before tax of N373.3 billion only and a profit after tax of N276 billion, its highest since 2018.
Nigeria like most countries in the world has faced a challenging 2020 due to the impact of COVID-19 on the economy, especially the private sector. However, mega-corporations like Dangote Cement appear to have even performed better during the year.
The cement industry in general also appears to have performed well during the year.
Taxation is an important fiscal policy instrument at the disposal of governments to mobilise revenue and promote economic growth and development. Governments use tax revenue to carry out their traditional functions such as the provision of public goods and services; maintenance of law and order; defence against external aggression; and regulation of trade and business to ensure social and economic maintenance.
Effective tax revenue mobilisation reduces an economy’s dependence on external flows, which have been found to be highly volatile.
Taxation also allows governments’ greater flexibility in designing and controlling their development agenda; conditions states to improve their domestic economic policy environment, thus creating a conducive environment for the much-needed foreign direct investments; and strengthens the bonds of accountability between governments and the citizens.
Meanwhile, the 2008/2009 global financial and economic crises provided useful lessons for countries on the need to direct more attention to domestic resources mobilisation efforts, including through increasing tax revenues, and shift away from over-dependence on external financial flows and export revenues.
Although tax structures vary considerably across countries, the primary objective of any tax structure is to attain maximum revenue and economic growth with minimum distortions.
Different countries have different philosophies about taxation and different methods of tax collection. In the same manner, countries have different uses for their revenue, which affect growth differently.