By Milcah Tanimu
President Tinubu has called upon the Senate to amend the 2023 Finance Act to include a one-time windfall tax on foreign exchange gains reported by banks in their 2023 financial statements. This proposal aims to generate additional revenue for capital infrastructure development, education, healthcare, and public welfare initiatives under the administration’s Renewed Hope Agenda.
In a letter to the Senate, President Tinubu emphasized the necessity of utilizing these funds to support critical national projects. The move comes in response to significant foreign exchange revaluation gains reported by Nigerian banks, totaling approximately N1.7 trillion in the first half of 2023, a stark increase from previous periods.
The Central Bank of Nigeria has already directed that these gains should serve as a buffer against FX rate fluctuations, rather than being distributed as dividends or operational expenses. This proposed tax amendment seeks to harness these windfall gains for broader socioeconomic benefits amidst ongoing financial sector reforms.
The proposal marks a strategic effort to leverage the banking sector’s profitability in navigating economic challenges while redistributing gains towards national development priorities.
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