Shareholders Condemn Tinubu’s Plan To Impose 50 Percent Windfall Tax on Banks’ Forex Gains

The New Dimension Shareholders Association of Nigeria (NDSA) has condemned the Federal Government’s decision to impose a 50 per cent windfall tax on banks due to their foreign exchange gains. This organisation, representing the interests of shareholders in Nigerian banks, criticised the tax as immoral and unjustifiable.

President Bola Tinubu recently proposed an amendment to the 2023 Finance Act, aiming to tax commercial banks’ forex gains for 2023. This proposal is awaiting Senate approval and has sparked considerable controversy among stakeholders.

On Thursday, the Nigerian Senate passed a bill for a second reading that sought to amend the 2023 Finance Act to impose a 50 per cent windfall tax on banks’ foreign exchange gains. This bill, sponsored by Senate Leader Bamidele Opeyemi, had sparked controversy within the Senate.

Senator Adamu Aliero supported the bill, saying that additional funds were needed to address the impending increase in the minimum wage. Senator Seriake Dickson opposed the bill, arguing that the economy was too depressed to handle more taxation and that banks faced recapitalisation challenges. Despite this opposition, the bill received substantial support from other lawmakers and was subsequently referred to the Committee on Appropriation for further review.

Patrick Ajudua, President of the New Dimension Shareholders Association (NDSA), has spoken strongly against this proposed tax.

The decision to impose a windfall tax on banks for forex gains is not only immoral but an attempt to unjustifiably destroy the positive financial performance of banks in this difficult operating environment and significantly reduce shareholders’ funds, Ajudua told Nairametrics.

He pointed out that the forex gains in question resulted from the devaluation of the naira, involving no actual cash movement, and thus should not be taxed.

Ajudua warned that shareholders would legally resist this tax policy and urged the government to explore alternative funding methods. He also recommended that the government focus on improving oil production and developing local industries to stabilise the naira and attract foreign investment.

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