Newscenter Media News The Federal Government has reiterated its tough stance on financial institutions failing to comply with the windfall tax on foreign exchange profits made in 2023.
This comes as the Minister of Finance, Wale Edun, and the Chairman of the Federal Inland Revenue Service (FIRS), Zack Adediji, met with the National Assembly’s finance committees to discuss amendments to the Finance Bill, 2024, on Monday.
The windfall tax, introduced in 2023, is a one-time levy imposed on banks’ excess foreign exchange earnings generated due to a significant devaluation of the Naira. The government aims to utilize the collected revenue for public services.
The Senate had given an expeditious passage 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.
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Speaking at the meeting, Edun said, the “bank windfall” profit levy, though small still constituted an important contribution to government finances at a time when revenues had substantially increased despite minimising taxes.
In his explanation, the FIRS chairman explained that the windfall tax was not a new tax imposed on banks.
Adedeji said, “These are the gains that you have without any contribution from you, without any value addition. They result from the effect of an adverse activity on others. And who are these others? If you look at the report of all manufacturing entities in the last one and a half years, you will discover that a lot of registered companies recorded huge losses from exchange transactions.
“Anywhere in the world, your duty as the government is to redistribute the wealth to sustain the progress and prosperity of the nation.
“So the loss suffered by manufacturing, as a result of these foreign gains, which is being recorded in the bank is what the government seeks to redistribute. And that is why we have this levy.
“So we seek your permission and your understanding in balancing this economic inequality that was occasioned due to the circumstances that we find ourselves.”
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