Business

Bank Directors Decry 70% Windfall Tax as Excessive, Ill-Timed Amid Recapitalisation Efforts

The Bank Directors Association of Nigeria (BDAN) has called on the federal government to reconsider the recently imposed 70 percent windfall tax on profits generated from foreign exchange transactions by banks.

The tax, set to apply from 2023 to 2025, has raised significant concerns in the banking sector, particularly regarding its timing and potential impact on ongoing recapitalisationefforts.

In a statement signed by BDAN’s, Chairman, Mustafa Chike-Obi, the association acknowledged the government’s intentions behind the tax but described the levy as, “excessively burdensome and ill-timed.” 

The body reiterated that the high tax rate could stifle growth and innovation within the banking industry, ultimately affecting the quality of financial services available to customers and the broader economy.

Chike-Obi highlighted the need for greater consultation and dialogue between the government and stakeholders in the banking sector before enacting such significant changes.

He added: “We, the Bank Directors Association of Nigeria (LTD/GTE) wish to formally address the recent imposition of a 70 per cent levy on the profits realised from foreign exchange transactions by banks for the financial years 2023 to 2025.

“We acknowledge and respect the intentions of the government in implementing this decision; however, we feel it is essential to express our concerns regarding the magnitude of the levy, its timing and the ambiguities surrounding its implementation.

“While the imposition of this windfall tax appears to be a response to the current economic climate, we suggest that a 70 per cent tax rate is excessively burdensome and ill-timed, particularly considering the ongoing bank recapitalisation efforts.

“Such a high levy has the potential to stifle growth and innovation within the banking sector; ultimately affecting the quality of services we provide to our customers and the broader economy.

“Moreover, we believe that it is vital for all stakeholders in the banking sector to have been consulted prior to the enactment of such significant changes in the Finance Act 2023. Open dialogue and negotiation are essential to ensure that policies are both equitable and effective.

“A primary concern lies in the ambiguities of the language in this amendment which leave critical questions unanswered. Such as, whether the windfall tax will be implemented as a Total Tax charge on banks, incorporating other taxes already levied such as Company Income tax, Tertiary Education Tax, National Information Development Levy (NITDL), etc.

“We also request clarification on what constitutes “FX transactions” to be taxed and the treatment of banks that may incur losses rather than gains during this period. We urge the government to provide clear guidelines on this matter to avoid further uncertainty.”

The statement further noted that Nigerian banks are already among the most heavily taxed globally, citing the existing AMCON levy imposed on total bank assets. BDAN urged the government to consider consolidating all taxes and levies on banks in the future to alleviate the sector’s tax burden.

“It would also be critical to reassure the banking community that future levies and taxes will not be arbitrarily imposed.”

Speaking further, Chike-Obi who is the Chairman of Fidelity Bank added: “In view of these concerns, we respectfully urge the National Assembly to revisit this amendment and engage in constructive discussions with stakeholders in the banking sector.

“By collaborating, we can develop a framework that effectively balances the need for revenue generation with the imperative of fostering a thriving banking environment that supports sustainable economic growth.”

The association further commended the Central Bank of Nigeria for recent efforts in stabilising the banking sector, stated that they remain committed to supporting and collaborating with regulators, government entities, and other stakeholders to find solutions that benefit all parties involved.

Nume Ekeghe

Follow us on:

AriseNews

View Comments

  • NEAT TOKUNBO VEHICLE FOR SALE AT CHEAPER AFFORDABLE PRICE.OFFICER IN-CHARGE O8O__6739__9O9O
    ** bag of cement #5,000
    *Bags of rice for sales in cheaper and affordable price #26,000 delivery per bag #3,500
    **Clothes for bees 50kg for #45,000, 100kg for #90,000 and 150kg for #160,000

    The replacement form is also available now is going on for interested candidate should contact the officer on (O8O__6739__9O9O )
    *SOME AVAILABLE TOKUNBO VEHICLES*
    Golf 2,3,4 ₦550,000 - ₦700,000
    Toyota Camry 2.2 Tiny-Light ₦950,000
    Toyota Camry Big-Daddy ₦950,000
    Toyota Camry Muscle ₦970,000
    Toyota Camry Spider ₦990,000
    Toyota Avelon ₦950,000
    Toyota Avensis ₦950,000
    Toyota Corolla ₦950,000
    Toyota Yaris ₦850,000
    Toyota Matrix ₦900,000
    Toyota Picnic ₦800,000
    Toyota Sienna ₦970,000
    Toyota Venza ₦2.6 million naira
    Toyota Rav4 ₦3, million naira
    Toyota 4Runner ₦2.7 million naira
    Toyota Hiace-Bus ₦3.6 million naira
    Toyota Highlander ₦4 million naira
    Toyota Land Cruiser ₦2.5 million naira
    Toyota Tundra ₦2.7 million naira
    Toyota Prado ₦3.2 million naira

    Mercedes-Benz C-Class ₦2.6 million naira
    Mercedes-Benz E-Class ₦3.5 million naira
    Mercedes-Benz G-Class ₦3 million naira
    Mercedes-Benz GLK ₦4.2 million naira
    Mercedes Benz ML350 ₦4.6 million naira

    Nissan Altima ₦850,000
    Nissan Armada ₦950,000
    Nissan Maxima N970,000
    Nissan Murano ₦980,000
    Nissan Primera ₦940,000
    Nissan Pathfinder ₦1.6 million

    Honda Accord ₦2.8 million naira

    Lexus Rx330 ₦980,000
    Lexus Rx350 ₦1.7 million naira
    Lexus Rx400 ₦2.9 million naira
    Lexus Gx470 ₦4 million naira
    TIPPER AND TRUCKS also available for sales

    NOTE : you are allowed to pay for the custom duties and clearance before the delivery take place

Recent Posts

President Tinubu Orders Probe Into Prosecution Of Minors From #EndBadGovernance Protests

President Tinubu has ordered an investigation into the arrest, prosecution of minors involved in #EndBadGovernance…

9 hours ago

Musk’s Lawyer Defends $1M-a-Day Giveaway, Denies Illegal Lottery Claims

Musk's $1M giveaway is under legal scrutiny in a Pennsylvania court case as it targets…

9 hours ago

Badenoch Unveils Shadow Cabinet with Jenrick As Shadow Justice Secretary, Patel As Shadow Foreign Secretary

Kemi Badenoch has appointed former rivals Jenrick, Patel, and Stride to senior roles in her…

9 hours ago

Boeing Workers Vote On New Contract To End Seven-Week Strike

Boeing workers voted Monday on a new contract to end a seven-week strike

9 hours ago

Former Delta Governor Ifeanyi Okowa Arrested By EFCC For Alleged N1.3 Trillion Diversion

EFCC has arrested ex-Delta governor Ifeanyi Okowa for alleged misuse of oil derivation funds, diverting…

9 hours ago

Search for Missing Persons Continues After Deadly Valencia Floods

Barcelona faces severe flooding as search and rescue efforts continue.

12 hours ago