Nigerian government is firm in imposing sanctions on banks that fail to pay windfall taxes

The Federal Government has reiterated its tough stance against financial institutions that fail to comply with windfall taxes on foreign exchange profits earned in 2023.

This came as the Minister of Finance, Wale Edun, and the Chairman of the Federal Inland Revenue Service (FIRS), Zack Adediji, met with the National Assembly finance committee to discuss amendments to the 2024 Finance Bill, on Monday.

The windfall tax, introduced in 2023, is a one-time levy imposed on excess foreign exchange earnings of banks generated due to the significant devaluation of the Naira. The government intends to use the revenue collected for public services.

The Senate has given speedy approval to President Bola Tinubu’s request to amend the Finance Act to impose a one-time windfall tax on banks’ foreign exchange profits in 2023.

Also Read: Ndume insists Tinubu is inaccessible, cites personal experience

Speaking at the meeting, Edun said the bank windfall profit levy, although small, was still an important contribution to government finances at a time when revenues were increasing substantially despite tax cuts.

In his explanation, the FIRS Chairman explained that windfall tax is not a new tax imposed on banking.

Adedeji said, “These are profits that you make without any contribution from you, without any added value. These profits are the result of the adverse impact of your activities on others. And who are these others? If you look at the reports of all manufacturing entities in the last one and a half years, you will find that many listed companies have recorded huge losses from exchange transactions.

“Wherever you are in the world, your job as a government is to redistribute wealth to support the progress and prosperity of the nation.

“So the losses suffered by the manufacturing industry, as a result of these overseas profits, that are recorded in the banks is what the government wants to redistribute. And that is why we have this levy.

“Therefore, we ask for your permission and understanding in balancing the economic gap that occurs due to the situation we are currently facing.”

Nigerian government takes tough stance on sanctions for banks that fail to pay windfall taxes first appeared on Latest Nigeria News | Headlines from Ripples Nigeria.