By Adedapo Adesanya
The Senate has passed the amended 2023 Finance Act after President Bola Tinubu requested an unprecedented windfall tax on foreign exchange (FX) revaluation profits of banks in the 2023 financial year.
The upper chamber of the parliament also increased the size of the 2024 appropriation act by N6.2 trillion to over N35 trillion to accommodate the new N70,000 minimum wage and others.
At the plenary on Tuesday, the lawmakers increased the one-time windfall levy on banks’ FX revaluation gains to 70 per cent from the 50 per cent demanded by President Bola Tinubu.
They gave Nigerian banks to remit the funds to the federal government on or before December 2024, warning that failure to do so would, upon conviction, see them pay the withheld tax along with a 10 per cent penalty and interest at the Central Bank of Nigeria’s (CBN) minimum discount rate.
“The levy shall be 70 per cent of the realised profits of all exchange transactions from banks. Any bank that fails to pay the windfall profit levy to the service, and has not executed the deferred payment agreement by 31st December 2024 shall be liable to pay a windfall levy withheld in addition to a fine of 10 per cent of the levy withheld or not remitted per annum and an interest at the prevailing Central Bank of Nigeria (CBN) minimum discount rate,” the Chairman of the Senate Committee on Finance, Mr Sani Musa, read to his colleagues yesterday.
The Senate also amended the commencement date of the amended act from 1st January 2023 to the commencement of the new foreign exchange policy after Mr Aminu Waziri Tambuwal objected to the retroactive nature of the amendment.
The lawmakers also increased the timeline for the application of the windfall levy from the end of 2023 to all profits from foreign exchange transactions from the beginning of the new forex policy to the 2025 financial year as stipulated in clause 2 of the amendment.
“Distinguished colleagues, a bill for an act to amend the Finance Act 2023 to impose and charge windfall levy on banks and to provide for the administration of the levy and matters related thereto 2024, a third reading taken and passed,” the President of the Senate, Mr Godswill Akpabio, said.