The Bank Directors Association of Nigeria (BDAN) has expressed strong reservations about the proposed 70% windfall tax on foreign exchange transaction profits, deeming it excessive and ill-timed. In a statement after their board meeting, BDAN acknowledged the government’s intentions but raised concerns about the tax rate’s magnitude, timing, and implementation ambiguities.
BDAN Chairman Mustafa Chike-Obi stated, “The 70% tax rate is burdensome and ill-timed, particularly during bank recapitalization efforts. It may stifle growth, innovation, and service quality, ultimately affecting the broader economy.” He emphasized the need for stakeholder consultation and open dialogue to ensure equitable and effective policies.
The association highlighted ambiguities in the amendment, seeking clarification on:
– Whether the windfall tax will be a Total Tax charge, incorporating existing taxes
– What constitutes ‘FX transactions’ subject to taxation
– Treatment of banks incurring losses during this period
BDAN argued that Nigerian banks are already heavily taxed globally due to the Asset Management Corporation of Nigeria levy. They urged the National Assembly to revisit the amendment and engage in constructive discussions with stakeholders to develop a balanced framework for revenue generation and sustainable economic growth.
Earlier, BDAN distanced itself from individual bank chairmen’s support for the proposed tax, emphasizing their commitment to collaborative engagement.
