Nigeria’s National Assembly has raised the windfall tax on banks’ foreign exchange (FX) gains to 70%, up from the initially proposed 50%. The increase is part of Nigeria’s revised Finance Act of 2024.
Nigerian President Bola Tinubu signed the Finance Act Order 2023 on 6 July 2023. It came into effect on 1 September, 2023.
Following this, on 17 July, 2024, Tinubu urged the National Assembly to amend the Finance Act to introduce a one-time windfall tax on banks. Initially the Nigerian government proposed a 50% windfall tax on profits generated from all foreign exchange transactions conducted by banks during the 2023 to 2025 financial years.
The Federal Inland Revenue Service (FIRS) will be responsible for collecting the proposed windfall tax.
Under the Finance Act, banks that fail to pay the windfall tax to FIRS and fail to establish a deferred payment agreement by 31 December, 2024, will be considered to have committed an offense.
In such scenarios, the banks will be liable for a penalty of 10% of the tax payable plus interest and imprisonment upon conviction.
