Battle For Billions: Banks And FIRS At Odds Over Windfall Tax

Battle For Billions: Banks And FIRS At Odds Over Windfall Tax

The ongoing battle between Nigerian banks and the Federal Inland Revenue Service (FIRS) over a one-off foreign exchange windfall tax has intensified, two weeks past the initial deadline. Following President Bola Tinubu’s call for a 50% tax on…Battle For Billions: Banks And FIRS At Odds Over Windfall Tax

banks’ realized foreign exchange gains last July, both legislative chambers approved the bill, with the Senate even raising the rate to 70%. The Central Bank of Nigeria (CBN) was set to debit the banks on December 31, 2024, but disputes have since delayed the process.

“The banks are engaged in a heated dialogue with the FIRS over the tax calculation,” a source familiar with the issue revealed. “Banks are presenting their own calculations, contesting the figures proposed by the FIRS.”

This proposed windfall tax was designed to capitalize on the significant gains Nigerian banks made from the naira devaluation in 2023. Four of Nigeria’s top banks—Access Bank, Zenith Bank, Guaranty Trust Bank, and United Bank for Africa—reported massive foreign exchange revaluation gains, leading to a substantial boost in their profits.

However, the retroactive nature of the tax has sparked controversy, with concerns about double taxation and potential legal disputes from industry experts and professional services firms like KPMG and PWC.

The government defends the tax as a strategic move, akin to practices in advanced economies, but critics argue that the rush to implement such a measure without thorough consultations has eroded public trust.

As the Tinubu administration seeks alternative revenue streams to address a projected N13 trillion deficit for the 2025 budget, this windfall tax is expected to generate up to N6.2 trillion—nearly half of the projected shortfall.

For More Information And News Update, Join Ireporteronline WhatsApp Channel With Link Below: https://whatsapp.com/channel/0029VaV4jB6DuMRgwqnJCF32 For advertisement inquiries only, kindly send a message to 09010649814 on Whatsapp