The Nigerian Senate has approved a significant legislative measure that will see banks subjected to a one-time windfall tax on their foreign exchange gains.
The bill, which received backing from the upper legislative chamber on Tuesday, was presented by Sani Musa, the chair of the finance committee.
During his presentation, Senator Sani Musa clarified that the purpose of the windfall tax is not for banks to distribute among their shareholders as dividends.
He emphasized that any bank failing to comply with the tax regulations would face additional penalties amounting to 10 percent of the owed tax.
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“The windfall tax is not to be paid by banks to their shareholders,” Senator Musa affirmed.
The initiative gained momentum following a letter to the National Assembly penned by Bola Tinubu last week.
In his correspondence, Tinubu urged lawmakers to amend the Finance Act 2023 to enable the federal government to levy a one-time windfall tax on banks’ foreign exchange gains.
Tinubu outlined the intended use of the windfall tax revenues, proposing that they be allocated towards capital infrastructure development, education, healthcare, and welfare initiatives.
“Furthermore, the proposed amendments to the finance acts 2023 are required to a one-time windfall tax on the foreign exchange gains realized by banks in their 2023 financial statements,” Tinubu stated.
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