Both the Executive arm of government and the National Assembly have said that the proposed Finance (Amendment) Bill, 2024 was not meant to inflict pain on Nigerians, adding the levy was only meant for banks on Forex gains.
This Bill seeks to amend the Finance Act, 2023 to provide for the imposition of windfall tax, assessment and review of profits declarations and for deferred payment agreements for financial institutions by the Federal Inland Revenue Service.
According to the Federal government, Monday, the move was a pivotal step in the nation’s economic transformation journey, saying that the bill seeks to impose a 50% levy on the realized profits from all foreign exchange transactions of banks within the 2023 financial year to December 2024.
These were the views of the Chairman, Senate Committee on Finance, Senator Sani Musa, APC, Niger East, his House of Representatives counterpart, Honourable James Faleke, the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun and the Chairman, Federal Inland Revenue Service, FIRS, Zack Adedeji during the Interactive session with the relevant Stakeholders on the Finance Act ( Amendment) Bill, 2024.
Meanwhile, both the Senate and the House of Representatives have summoned the Governor of Central of Nigeria, CBN, Yemi Cardoso and his team and bankers Committee to appear before it Tuesday at 11 am to make their inputs on the proposed bill.
In his remarks, the Minister of Finance, Edun explained that the monies to be taken from the banks should not be considered as tax but levies, dismissing the view that the levies would be passed on implicitly to customers.
Edun said, “This is an important opportunity given to all stakeholders. All over the world it is common that the society takes a share of such profit
“This is an important contribution to the finances of the government at this time, however it is important to say that has been robust without raising taxes , there is a minimization of taxes, government revenue has increased substantially. Broadly speaking it a levy on 2024 realized gains on foreign exchange within the banking sector. It is a pity that the banking system is not here and even the central bank is not here to participate in this discussion.
On his part, the FIRS boss, Adedeji however disclosed that surcharging the banks for the sole aim of redistributing wealth has become most imperative to balance the shortage recorded by other sectors owing to the policies.
According to him, the Manufacturing sector has made N1.7 trillion loss as a result of the forex and based on that the agency cannot tax them, adding, “it’s not that we are going after the profit but recovering the losses incurred by the activities as a result of their own ineptitude, bringing a policy to correct the policy decision. Everybody realized that it is not their money, money earned in the normal course of your business.”
Earlier in his opening remarks, Chairman of the joint Committee, Senator Musa who noted that the amendment of the Finance Act, 2024 is to impose and charge windfall tax on Banks and provide for the administration of the Tax, said that the intent behind the levy is to ensure that banks contribute their fair share to national revenue, especially in light of the substantial gains made from foreign exchange.
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Senator Musa said, “The proposed Finance (Amendment) Bill, 2024, is a pivotal step in our nation’s economic transformation journey. This bill seeks to impose a 50% levy on the realized profits from all foreign exchange transactions of banks within the 2023 financial year to December 2024. The intent behind this levy is to ensure that banks contribute their fair share to national revenue, especially in light of the substantial gains made from foreign exchange activities. The levy does not affect Nigerians, it is not on Nigerians, but the huge profits on forex that the banks made.
“His Excellency President Bola Ahmed Tinubu GCFR’s imenation has initiated numerous economic reforms aimed at propelling Nigeria towards a future of advancement and prosperity.
“This bill is one of the bold decisions undertaken to provide the government with the necessary funding to address our country’s multifaceted infrastructure deficit. The success of these reforms hinges on our collective support and active participation.
“Our discussions today will cover the detailed provisions of the bill, including the Federal Inland Revenue Service’s role in assessing, collecting, and enforcing the levy, the mechanisms for deferred payment agreements, and the penalties for non-compliance. It is crucial that we address any concerns, suggestions, and insights you may have to ensure the smooth implementation of this levy.
“Your presence and input are invaluable as we work together to refine this legislation for the benefit of all Nigerians. Let us embrace this economic transition, support the government’s efforts, and collaborate to achieve a balanced and prosperous future for our nation.”