Experts Back FG’s 70% Windfall Tax on FX Gains
The Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN) have pledged their support for the government’s recent initiative to impose a 70% windfall tax on foreign exchange (FX) gains accrued by banks.
During the association’s 4th Joint Council Retreat in Abuja, ANAN president, Samuel Agbeluyi, stated that the new tax policy will help address the widening fiscal deficit and bolster national revenue amid ongoing economic challenges.
The National Assembly had last week announced that President Bola Tinubu requested an amendment to the 2023 Finance Act to impose a one-time windfall tax of 50 percent on banks’ FX gains from last year.
The president had previously explained that the windfall tax would be used to finance infrastructural projects, education, healthcare, and other critical areas.
He said: “Windfall tax is not new. It is what is called a prosperity tax. It was done when during Covid, many were at home and many activities went down and the people in the telecom did very well. So, if you did very well because of this calamity that has befallen the whole world or befallen this country, can you spare a little bit of your prosperity?
“The reason for taxation is for distribution of income and as a result of that distribution, the banks have done very well. We congratulate them for doing well. But, if we isolate you, and you are the only one doing well and the other business sectors are not doing well and they are declaring losses and the government allows that to continue, what will happen in another two to three years when all the companies fold up? So, let us share in your prosperity.”
Adeluyi urged citizens not to view the fine as punitive, stating, “It will ultimately benefit everyone. Once these companies thrive, they will be able to open more businesses, positively impacting the banks and contributing to Nigeria’s greatness. The economy is a system, and you cannot isolate one part from the other; a holistic view is essential.”
Dr. James Ekerare Neminebor, President and Chairman of the Council of ANAN, expressed dissatisfaction with Nigeria’s current tax structure and its impact on citizens.
Supporting the CITN President’s stance on the windfall tax, Neminebor said, “As my president mentioned, it’s about wealth distribution. If you have significant wealth, paying this tax is acceptable, but it shouldn’t be overly burdensome for the taxpayers.”
