Stakeholders in the Nigerian financial sector have urged the federal government to reconsider the imposition of 50 per cent tax on foreign exchange (FX) profits of banks.
They called on President Bola Tinubu to withhold assent to the 2024 Finance Bill 2024 as passed by the National Assembly.
The stakeholders were unanimous that the tax might be counterproductive in light of the critical contributions of banks to the ongoing economic reforms.
President of the Association of Corporate & Marketing Communication Professionals of Banks (ACAMB), Rasheed Bolarinwa, said banks have shown enormous support for government’s economic agenda and should not be burdened with a new levy that would be counterproductive at this time.
He said there is a need for further extensive consultation on the levy, urging the president to withhold assent to the bill.
He noted that, with the ongoing recapitalisation, which is aimed at supporting government’s $1 trillion economic agenda, banks need more monetary and fiscal incentives now.
A former President of the Chartered Institute of Stockbrokers (CIS), Olatunde Amolegbe, said the levy could be counterproductive with huge consequences for the ongoing banking recapitalisation, which is intended to support government’s $1 trillion economy target.
According to him, imposing such a levy in the middle of ongoing banking recapitalisation may send a wrong signal to investors and impinge on the ability of banks to raise much-needed capital.
Managing Director, HighCap Securities Limited, David Adonri, said the tax amounts to the expropriation of shareholders’ wealth.
“It defeats the purpose of making banks strong enough to support the envisaged $1 trillion economy, an objective that is compelling banks to recapitalise,” Adonri said.
According to him, it is unfair to deny shareholders, who would have borne the brunt in the event of losses, the direct benefits of the FX gains.
