Reps approve 70% proceeds from forex transactions by banks

The House passed the Finance Act, 2024 which seeks to impose a 70 per cent levy on the profits realized by banks from all foreign exchange transactions.

The Executive bill was adopted by members at the Committee of Supply chaired by Speaker Tajudeen Abbas.

According to report presented by Chairman, House Committee on Finance, Hon. James Faleke, the Executive provides for the imposition of windfall tax, assessment and review of profits declarations; and for deferred payment agreements for financial institutions by Federal Inland Revenue Service.

He explained that the Committee interacted with some Stakeholders including: Federal Ministry of Finance and Coordinating Economy, Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS) and Bankers Committee.

“The Joint Committee observed that the Banks enjoyed windfall as a result of Exchange rate unification policy of the Federal Government;

“That the windfall was as a result of FX allocation to selected commercial Banks.

“That the policy does not permit the use of the windfall for dividend payment.”

In its recommendations, the joint Senate and House Committee proposed that the application of the provision of section 30 of the Principal Act shall take effect from 1st January 2023.

“That levy shall be 70 percent on the realized profit from all exchange transactions of Banks.

“Any bank that fails to pay the windfall profit levy to the Service and has not executed a deferred payment agreement by 31st December, 2024, shall be liable to pay the windfall profit levy withheld or not remitted in addition to a fine of 10% of the levy withheld or not remitted per annum and interest at the prevailing Central Bank of Nigeria (CBN) minimum rediscount rate.”

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