Otedola Supports Windfall Tax, Tells Banks To Cut Down On Millions Spent On Private Jets

Femi Otedola, the chairman of (First Bank of Nigeria) FBN Holdings, has strongly supported the Nigerian government’s proposed windfall tax on banks’ foreign exchange gains. In a statement on Wednesday, Otedola said that the revenue generated from this tax could be used to fund essential public services like healthcare, education, and infrastructure.

The proposed windfall tax in Nigeria aims to impose levies on banks that have gained in foreign exchange due to naira fluctuations. Otedola believes that taxing these gains will ensure a fairer distribution of wealth, allowing those who benefit disproportionately to contribute more significantly to society.

The revenue generated from windfall taxes can be channelled into essential public services such as healthcare, education, and infrastructure, benefiting all citizens and helping to reduce social inequalities, he said.

He noted that the recent consolidation of foreign exchange rate systems has led to the depreciation of the Naira, resulting in substantial increases in the value of bank assets denominated in U.S. dollars.

In addition to supporting the windfall tax, Otedola criticised the extravagant spending habits of some bank executives, particularly regarding their ownership and maintenance of private jets. He revealed that Nigerian banks spend an estimated $50 million annually on maintaining these jets, with over $500 million spent purchasing nine private jets by four banks.

He said such extravagance erodes public trust in financial institutions and diverts resources from crucial areas like operational efficiency and customer service. Otedola urged the banking sector to realign its economic priorities.

President Bola Tinubu’s administration requested the Senate amend the 2023 Finance Act to accommodate this windfall tax. A rate of 50 per cent on banks’ foreign exchange gains was initially suggested. However, the Senate proposed increasing this rate to 70 per cent.

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