ANAN, CITN back FG’s windfall tax on foreign exchange
The Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN) have voiced their support for the Federal Government’s recent decision to impose a 70 percent windfall tax on foreign exchange (FX) gains accrued by banks. The National Assembly, last week, said President Bola Tinubu requested the amendment of […]
The Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN) have voiced their support for the Federal Government’s recent decision to impose a 70 percent windfall tax on foreign exchange (FX) gains accrued by banks.
The National Assembly, last week, said President Bola Tinubu requested the amendment of the 2023 Finance Act to impose a one-time windfall tax of 50 percent on banks’ FX gains last year.
Tinubu explained that the windfall tax will be used to finance infrastructure projects, education and healthcare, among others.
Speaking at the associations’ 4th Joint Council Retreat on Friday in Abuja, President and Chairman of Council CITN, Mr. Samuel Agbeluyi said that the new tax policy will help in addressing the widening fiscal deficit and bolster national revenue amid ongoing economic challenges.
Agbeluyi also emphasised that the tax is a necessary measure to ensure a fair distribution of economic benefits, adding that banks have significantly benefited from fluctuations in the FX market.
According to him, “windfall tax is not new. It is what is called 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 from your prosperity.”
The CITN President charged citizens not to view the fine as a punitive measure, saying, “It will still benefit everybody. Once the companies are able to thrive, tomorrow they will be able to open more businesses and this will have a direct impact on the banks and Nigeria will be great. Economy is a system. You cannot isolate one from the other And at the top level, you must have a holistic view of the whole system.”
On his part, Dr. James Ekerare Neminebor, President and Chairman of the Council of ANAN, expressed dissatisfaction over Nigeria’s current tax structure and its impact on citizens.
Neminebor who criticised the overlapping tax responsibilities in many sectors, lauded President Bola Tinubu’s commitment to overhauling the nation’s complex tax system.