Tinubu seeks “one-off windfall tax” on banks’ forex gains but refuses to reduce the cost of governance
By Jeph Ajobaju, Chief Copy Editor
A “one-time windfall tax” on the foreign exchange (forex) gains of banks has been proposed by Bola Tinubu to fund his latest N6.2 trillion addition to the N28.7 trillion 2024 budget as pressure mounts on the President to stop taking loans to plug gaps he creates by profligate allocation of funds.
Such a tax will increase the operational costs of banks that will ultimately pass it to customers in higher charges, in an environment where citizens are lamenting over-taxation and wasteful spending by Tinubu who turns a deaf ear to their cries for reduction in the cost of governance.
Taxing banks’ forex gains is contained in his letter to the Senate seeking injection of N6.2 trillion into the 2024 Appropriation Act of N28.7 trillion to raise it to N34.9 trillion.
Senate President Godswill Akpabio at plenary on Wednesday read out the letter which proposes allocating N3.2 trillion for infrastructure and N3 trillion for recurrent expenditure.
“Pursuant to Section 58 (2) of the Constitution of the Federal Republic of Nigeria as amended, I forward herewith the above named bills for consideration and passage by the Senate,” the letter said.
“The Appropriation Act Amendment Bill seeks to amend the principal act to provide the sum of N3,200,000,000,000 for Renewed Hope Infrastructure Projects and other critical infrastructure projects to be undertaken across the country and the sum of N3,000,000,000,000 to meet further recurrent expenditure requirements necessary for the prosper operation of the federal government.
“They shall be funded by accruing to the federal government of Nigeria.”
Previous increase of 2024 budget from N27.5 trillion to N28.7 trillion
Tinubu also in the letter urged the National Assembly (NASS) to amend the Finance Act of 2023 to target windfalls generated by banks from “foreign exchange gains”.
He explained the aim is to ensure a fair taxation policy and address the profits banks accrue due to fluctuations in forex rates.
This, he said, is to fund capital infrastructure development, education, health care access and public welfare initiatives.
“Furthermore, the proposed amendments to the Finance Acts 2023 are required for a one-time windfall tax on the foreign exchange gains realised by banks in their 2023 financial statements to fund capital infrastructure development, education, and healthcare as well as welfare initiatives all which are components of the Renewed Hope Agenda.”
The NASS passed the 2024 Appropriation Bill, raising its size from Tinubu’s proposed N27.5 trillion to N28.7 trillion.
The budget, which lawmakers increased by N1.2 trillion, has N1.74 trillion earmarked for statutory transfers, N8.27 trillion (debt servicing), N8.76 (recurrent expenditure), and N9.99 trillion (capital expenditure).
The Senate said it made adjustments to the bill to stave off further requests from Tinubu.
The adjustments made at the time included foreign exchange differential, increase of Government-Owned Enterprises’ (GOEs’) revenue, GOE’s personnel reduction, Service Wide vote (wage adjustment) and reduction from Service Wide.
_________________________________________________________________
Related articles:
Tinubu in panic mode as youths plan countrywide hunger protest to give him the ‘Kenyan treatment’
NACCIMA warns food inflation at 40.87% may trigger more hunger protests
BudgIT alerts Tinubu allocates N732b to vague empowerment projects in 2024 budget
Citizens don’t feel impact of Tinubu’s N4tr palliatives, says LP
Tinubu’s renewed hope agenda a scam for hopelessness, Northern elder fumes
_________________________________________________________________
