A closed-door meeting took place on Wednesday between President Bola Tinubu and representatives from Nigeria’s commercial banking sector at the State House in Abuja. The focus of the discussion was the recently imposed windfall tax.
Led by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the team included notable figures like Mr. Tony Elumelu, Chairman of the United Bank for Africa, and Ladi Balogun, Group Chief Executive Officer of the First City Monument Bank.
After the meeting, Edun briefed State House Correspondents, highlighting the importance of the banking sector in driving economic growth.
During the discussion, Mr. Zacch Adedeji, Chairman of the Federal Inland Revenue Service, outlined the government’s plan to streamline the tax system by focusing on taxing profits and supporting companies’ capital growth.
In response to significant foreign exchange gains reported by banks in 2023, President Tinubu introduced a one-time windfall tax in mid-July. The tax is part of the 2023 Finance Act amendment aimed at generating additional revenue for national development projects.
While the proposal has faced criticism, including concerns about its impact on the banking sector’s stability, the amendment bill was recently passed by the Senate. The bill increased the proposed windfall levy from 50% to 70% and extended its applicability through 2025.
Critics have raised issues about retroactive implementation and potential repercussions for bank customers. However, Edun emphasized the government’s aim to redistribute wealth and ensure a fair tax system.
During the meeting, the bank leaders expressed their commitment to complying with the windfall levy. They viewed it as a means to align with the administration’s reform agenda and promote inclusive prosperity.
Elumelu of UBA stressed the importance of mutual prosperity, emphasizing the benefits of creating jobs and fostering a prosperous society through business growth and investment.
Balogun from FCMB echoed support for the government’s pro-growth stance and highlighted the need for collaboration between the banking sector, investment community, and the administration to drive economic development.
The meeting aimed to ensure a cohesive approach in transmitting the government’s reform agenda and fostering economic growth across all sectors. The dialogue underscored the importance of supporting stakeholders and sustaining a conducive environment for investment and progress.