The Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, yesterday defended the Federal Government’s proposed one-off levy on the 2023 foreign exchange (forex) windfall by banks.
The Federal Government’s proposal to tax the banks’ gain is contained in the proposed amendment to the 2023 Finance Act before the National Assembly.
Also before the National Assembly is an Executive Bill seeking an amendment to the 2024 Appropriation Act to raise N6.2 trillion to fund infrastructure.
Appearing before the National Assembly Joint Committee on Finance, Edun and Federal Inland Revenue (FIRS) Chairman, Zach Adedeji, said it is normal for the government to impose such a levy on windfall arising from changes in government policy and ensure that the profit is redistributed to the people.
The minister told the panel that there is nothing new in imposing such levies on windfall all over the world, and in this case, the local banks profited so much from foreign exchange transactions not by their own ingenuity but as a result of changes in government policy.
Edun said: “The bank windfall profit levy, although small, still constitutes an important contribution to government finances at a time when revenues have substantially increased despite minimizing taxes.”
The minister explained that the monies to be taken from the banks should not be considered as tax but levies, dismissing the view that the levies would be passed on to customers.
