National Assembly raises Windfall Tax on bank’s foreign exchange profit from 50% to 70% 

The National Assembly has given approval to the proposed amendment to the Finance Act, which aims to introduce a 70 percent tax on banks’ substantial foreign exchange profits in 2023

The Finance Act (amendment) Bill was passed after each chamber reviewed the report of committees on it on Tuesday.

The report, considered during plenary, was from the Joint National Assembly Committees on Finance.

It was learnt that the Executive had proposed a 50 percent Windfall Tax in the proposal sent to the National Assembly for consideration, but it was increased to 70 percent by the lawmakers. 

The Chairman of the Senate Committees on Finance, Senator Sani Musa, presented the report to the Red Chamber and Hon. James Faleke in the House of Representatives.

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The Joint Committee, in its report, noted: “That the banks enjoyed windfall as a result of exchange rate unification policy of the Federal Government.

“That the windfall was as a result of FX allocation to selected Commercial Banks. 

“The policy does not permit the use of windfall for dividend payments.

“That the application of the provision of Section 30 of the Principal Act shall take effect from 1st January, 2023.

“The levy shall be 70% (for federal government and 30% for banks) on the realised profits from all exchange transactions of Banks.

“Any bank that fails to pay the windfall profit levy to the Service, has not executed the deferred payment agreement as at the time of commencement of the regime, shall be liable to pay the windfall levy withheld or not remitted in addition to a fine of 10% of the levy withheld or not remitted per annum and interest at the prevailing Central Bank of Nigeria, minimum discount rate.”