FG to receive over N1 trillion revenue from Windfall Tax, see banks that have paid

• The national authorities introduced the Windfall taxation successful 2024, mandating banks to wage 70% of the profits made from FX transactions
• This sparked a batch of reactions, with respective slope stakeholders making moves to lobby the authorities officials to alteration it
• The authorities is present acceptable to gain implicit N1 trillion from the tax, arsenic banks state their 2024 fiscal year

Legit.ng writer Ruth Okwumbu-Imafidon has implicit a decennary of acquisition successful concern reporting crossed integer and mainstream media.

The national authorities of Nigeria could beryllium looking to marque implicit N1 trillion successful gross from the windfall tax.

So far, six banks person paid astir N205.59bn arsenic windfall taxation for the 2024 fiscal year, portion respective others are yet to pay.

Audited reports submitted by the banks and filed connected the Nigerian Exchange Limited (NGX) amusement that banks are already complying, and connote that the attempts to lobby the authorities to trim the taxation person failed.

President Bola Tinubu, past year, introduced the windfall taxation mandating banks to wage much than fractional of their profits from FX transactions to the government. Photo credit: State House
Source: Twitter

Banks wage windfall tax

The highest paid truthful acold is from Zenith Bank with a windfall taxation of N63.31 cardinal for the twelvemonth 2024, portion UBA followed intimately with N57.91 cardinal combined for 2023 and 2024.

GTCO paid N51.25bn; Stanbic IBTC Holdings paid N17.18bn, and Fidelity Bank paid N13.33bn for the 2024 fiscal year.

Wema Bank paid the slightest truthful far, with N2.62 cardinal paid arsenic windfall levy for the 2024 fiscal year, the PUNCH reports.

Banks respond to Windfall tax

In July 2024, the national authorities imposed a 70% windfall taxation connected profits made from Foreign speech transactions from 2023 to 2025.

The authorities argued that the naira devaluation successful mid-2023 led to disproportionate gains for the banks, and the windfall levy would guarantee the money goes backmost to the authorities to beryllium utilized for projects of impact.

Nigerian billionaires, Femi Otedola and Tony Elumelu, supported the windfall tax contempt absorption from different banking stakeholders.

Otedola stated that it was a amended usage of the profits, alternatively of allowing them to walk up to $50 cardinal connected backstage pitchy purchases and maintenance.

Other slope stakeholders made efforts to lobby the authorities to trim the percent of the windfall tax, but the attempts yielded nary results.

FG to cod implicit N1 trillion from Windfall tax

A apical authorities authoritative disclosed that the authorities could marque implicit N1 trillion from the Windfall Tax/Levy, arsenic respective banks inactive person an outstanding N600 cardinal to pay.

He noted that the banks successful question are inactive successful discussions with the government, seeking ways to trim the tax.

Apart from the N205 cardinal paid truthful far, a look astatine fiscal statements from different banks shows that determination could beryllium different N425 cardinal to beryllium collected arsenic windfall taxation from 7 banks.

In its study titled ‘Nigeria’s Proposed Windfall Tax connected Foreign Exchange Gains is Credit Negative for banks’, planetary standing institution Moody shared concerns astir however it could negatively interaction banks.

The windfall taxation means that banks person to remit 70% of profits made from FX transactions successful the 2023, 2024 and 2025 fiscal year. Photo credit: Fayez Nureldine/ Nurphoto
Source: Getty Images

According to Moody, banks whose superior adequacy is adjacent to regulatory thresholds could beryllium negatively impacted.

Mr. Moses Igbrude, the National Coordinator of the Independent Shareholders Association of Nigeria, besides noted successful his comments that if the authorities seeks to stock successful the profits of banks that benefited from the naira devaluation, past it should besides supply enactment for businesses that suffered FX losses.

Igbrude noted that the authorities is lone taking successful the profit, without taking up corresponding work to supply security, powerfulness and different infrastructure.

Expert says Windfall taxation tin enactment for Nigeria

In related news, the Managing Director/Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, outlined the benefits of the windfall tax.

Rewane disclosed that the taxes are designed to capture the profits from unexpected economical events specified arsenic the naira devaluation.

He noted that if enactment to bully use, similar backing infrastructures, it would amended payment Nigerians.

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Source: Legit.ng