The Nigerian Senate has officially endorsed a legislation aimed at levying a one-time windfall tax on banks derived from their foreign exchange (forex) profits. This significant decision was made on Tuesday following a report presented by Sani Musa, the chairperson of the Senate’s finance committee.
During his address to the legislative chamber, Senator Musa emphasized that this windfall tax is not designed to be distributed as dividends to the banks’ shareholders. He also warned that any financial institution failing to meet its tax obligations would incur an additional 10 percent charge on the amount due.
“The windfall tax is not meant to be allocated to shareholders,” Musa clarified.
In a related move last week, President Bola Tinubu submitted a letter to the National Assembly advocating for amendments to the Finance Act of 2023, which would empower the federal government to impose taxes on banks’ forex earnings.
In his correspondence, President Tinubu highlighted that the amendments would facilitate a one-time windfall tax applicable to the forex profits reported by banks in their financial statements for the year 2023.
The president pointed out the critical role of the windfall tax in financing essential sectors such as capital infrastructure, education, healthcare, and various social welfare programs.
The tax’s implementation is anticipated to significantly enhance the government’s financial capabilities, contributing positively to the nation’s overall development trajectory.
