Senate Reviews 2023 Finance Act to Tax Banks’ Foreign Gains  

The Senate, Wednesday, considered the amendment of the 2023 Finance Act aimed at taxing foreign exchange proceeds realised by banks nationwide in their financial statements for the purpose of funding strategic national projects.

The upper chamber equally entertained another bill, which sought to amend the Appropriation Act, 2024 with a view to increasing the public expenditures from ₦28.7 trillion to ₦34.9 trillion, thus accounting for a 21.6% upsurge.

The Leader of the Senate, Senator Opeyemi Bamidele moved the bills at the plenary on Wednesday with most senators supporting the bills in the light of the country’s socio-economic realities.

While the Appropriation Act (Amendment) Bill, 2024 mainly seeks to increase the 2024 public spending by ₦6.2 trillion, the 2023 Financial Act (Amendment) Bill, 2024 aims at imposing a one-time windfall tax on foreign gains realised by banks.

The two bills – Appropriation Act (Amendment) Bill, 2024 and Financial Act (Amendment) Bill, 2024 – were initiated at the request of President Bola Ahmed Tinubu to the National Assembly to meet clearly defined obligations of the federal government in the 2024 fiscal year.

Debating the amendment bills on Wednesday, Bamidele explained the intent of the proposed finance legislation, noting that it was designed “to impose a one-time windfall tax on foreign gains realized by banks in their 2024 financial statements.”

The windfall tax, according to the senate leader, will be used to fund capital infrastructure development, education, and health care access as well as public welfare initiatives to give sound and solid footing to the Renewed Hope Agenda of President Tinubu.

In his own contribution, Chairman, Senate Committee on Land Transport, Senator Adamu Aliero pointed out that the minimum wage would arrive at the National Assembly soon, hence the need to get additional funding to cater for it.

Aliero said: “If we do not provide minimum wage before the end of this month, there will be public outcry that may lead to strike.” He, however, stressed that banks made huge profits after all.

However, in his argument, Chairman, Senate Committee on Ecology and Climate Change, Senator Seriake Dickson, representing Bayelsa West, opposed the bill arguing that the economy is currently depressed to allow for more taxation.

Dickson said: “Let’s step down the taxation on banks for wider consultation. We cannot run our government by continuously taxing people and organisations. We should be cautious because we are managing a depressed economy, even the banks are still battling with recapitalization.”

Apart from Dickson, other senators, who contributed to the debate, unanimously supported the bill. As a result, the bill was read for a second time and referred to the Senate Committee on Appropriations for further legislative input and is expected to report back in a week.

On the Appropriation Act (Amendment) Bill, 2024, the President of the Senate, Senator Godswill Akpabio read the letter of the President, which asked the National Assembly to increase the government spending in the 2024 fiscal year by ₦6.2 trillion.

In the letter, President Tinubu specifically asked the National Assembly to allocate ₦3.2 trillion for infrastructure projects and N3 trillion for recurrent expenditure.

“Pursuant to section 58 (2) of the constitution of the federal republic of Nigeria as amended, I forward herewith the above named bills for consideration and passage by the senate,” Tinubu said.

“The appropriation act amendment bill seeks to amend the principal act to provide the sum of ₦3,200,000,000,000 for Renewed Hope Infrastructure Projects and other critical infrastructure projects to be undertaken across the country and the sum of ₦3,000,000,000,000 to meet further recurrent expenditure requirements necessary for the proper operation of the federal government.”