The Bank Directors Association of Nigeria (BDAN) has expressed their concerns regarding the recently proposed 70% windfall tax on banks’ earnings from foreign exchange transactions by the Federal Government.
Chairman of Bank Directors Association of Nigeria (BDAN), Mustafa Chike-Obi stated thus:
“We, the Bank Directors Association of Nigeria 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 urge the government to provide clear guidelines on this matter to avoid further uncertainty”