Nigerian Senate Advances Bill to Impose Windfall Tax on Banks

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The Nigerian Senate has progressed a bill aimed at amending the Finance Act, 2023, to introduce a windfall tax on banks and outline its administration. The bill received swift consideration, passing its first and second readings on Wednesday. It is sponsored by Senate Leader Bamidele Opeyemi.


President Bola Tinubu had formally requested the Senate to implement a one-time windfall tax on foreign exchange gains realized by banks. The revenue from this tax is intended to support capital projects, enhance access to education and healthcare, and fund public welfare initiatives under the Renewed Hope Agenda.


In his letter to the Senate, President Tinubu emphasized the importance of the bill and urged for its swift passage. Leading the debate, Opeyemi underscored the significance of the President's proposals, noting that they address critical needs of Nigerian citizens.


Senator Adamu Aliero, supporting the amendment, highlighted the urgency of securing additional funding, especially with the upcoming proposal for a new minimum wage expected in the National Assembly. He warned that failure to provide for the minimum wage could result in public dissatisfaction and potential strikes, while pointing out that banks have been making substantial profits.


Conversely, Senator Seriake Dickson of Bayelsa West opposed the bill, arguing that the current economic conditions do not favor additional taxation. He suggested pausing the taxation of banks for broader consultations, expressing concern over the continuous imposition of taxes amidst a depressed economy. He noted that banks are still struggling with recapitalization challenges.


Despite some opposition, the bill garnered significant support from other lawmakers and successfully passed its second reading. The bill has been referred to the Committee on Appropriation for further legislative review and input, with a report expected in due course.


This legislative move marks a critical step towards leveraging bank profits to fund essential public services and aligns with broader efforts to stabilize and grow Nigeria’s economy.

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