The Senate warned that any bank that withholds its tax would be liable to pay 10% in addition to what they ought to have paid.
The Senate has passed the Finance Act (Amendment) Bill, 2024 and increased the windfall levy on banks’ foreign exchange revaluation gains from 50% as proposed by President Bola Tinubu to 70%.
This followed the consideration and adoption of the report of the senate committee on finance presented by its Chairman, Sani Musa (APC, Niger East) during Tuesday’s plenary.
Originally, the bill called for a 50% levy from the banks’ earnings on exchange transactions. However, the senate reviewed it to 70%, emphasising that the windfall was the result of government policy that needed to be redistributed and not any effort on the part of the banks or value addition.
OrderPaper recalls that in the previous week, President Tinubu requested that the Finance Act 2023 be amended to impose and charge windfall tax on banks and provide for tax administration and related matters.
The president stated that the windfall tax will be utilised to finance welfare initiatives, healthcare, education, and capital infrastructure development.
Presenting the report, Sen. Musa said the bill sought to amend the Finance Act 2023 to impose and charge windfall tax on banks’ foreign exchange gains, but with an amendment from 50% to 70% as the levy charge.
READ ALSO: Bank windfall tax: Profits, pitfalls and projection | Analysis
According to him, the additional N6.2 trillion contained in the Appropriation Amendment Bill would be financed by the one-time windfall tax on banks’ foreign exchange profits.
Sen. Sani Musa said, “The levy shall be 70% 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% of the levy withheld or not remitted per annum and an interest at the prevailing Central Bank of Nigeria (CBN) minimum discount rate.
“This is as approved by the National Assembly and other independent sources of revenue.”
