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The Chartered Institute of Taxation of Nigeria (CITN) and the Association of National Accountants of Nigeria (ANAN) have applauded the federal government for its recent decision to impose a 70 per cent windfall tax on foreign exchange (FX) gains accrued to banks.
The President and Chairman of Council CITN, Mr. Samuel Agbeluyi, said at the weekend in Abuja during the associations’ 4th Joint Council Retreat that the new tax policy would help in addressing the widening fiscal deficit and bolster national revenue amid ongoing economic challenges.
He stressed that tax was a necessary measure to ensure a fair distribution of economic benefits, adding that banks had significantly benefited from fluctuations in the FX market.
Agbeluyi noted that tax was a necessary measure to ensure a fair distribution of economic benefits, adding that banks had significantly benefited from fluctuations in the FX market
“Windfall tax is not new. It is what is called prosperity tax. It was done when during COVID-19, many were at home and many activities went down and the people in the telecom did very well. So, if you did very well because of this calamity that has befallen the whole world or befallen this country, can you spare a little bit of your prosperity?
“The reason for taxation is for distribution of income and as a result of that distribution, the banks have done very well. We congratulate them for doing well. But, if we isolate you, and you are the only one doing well and the other business sectors are not doing well and they are declaring losses and the government allows that to continue, what will happen in another two to three years when all the companies fold up? So, let us share from your prosperity, “Agbeluyi said.
He also urged the government to use the taxes collected judiciously for the benefit of all.
In the same vein, the President and Chairman of the Council of ANAN, Dr. James Ekerare Neminebor, expressed his dissatisfaction over Nigeria’s current tax structure and its impact on citizens.
Neminebor, who criticised the overlapping tax responsibilities in many sectors, reinforced the stance of the CITN president on the windfall tax, by lauding President Bola Tinubu for overhauling the nation’s complex tax system.
“It is the distribution of wealth. If you have so much and you are paying, let it go, but let it not be too much for the person paying this tax,” Neminebor said.
He also asserted that recent removal of withholding tax for educational facilities, like books and medical facilities for health was a good development for the country.
The view by CITN and ANAN was on the back of recent revelation by the National Assembly that President Tinubu requested the amendment of the 2023 Finance Act to impose a one-time windfall tax of 50 percent on banks’ FX gains last year.
The president said the windfall tax would be used to finance infrastructure projects, education and healthcare, among others.
Olawale Ajimotokan
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