In a significant development, Group First Bank Chairman, Femi Otedola and the Chairman of the African Union Bank (UBA), Tony Elumelu, have expressed support for the Federal Government’s new forex windfall tax.
This decision follows President Bola Tinubu’s motion on July 17 in the National Assembly to amend the Finance Bill, 2023, which unilaterally imposes a tax on bank profits.
The National Assembly subsequently raised concerns among financial experts by increasing the levy from 50 percent to 70 percent in the amended Finance Bill, 2024.
Companies that make huge profits in a good market are often subjected to a windfall tax.
Following a meeting at the State House of Assembly in Abuja, which was approved by President Tinubu, Elumelu and Otedola said they approved the levy.
Elumelu said in his speech that the wind tax was aimed at combating poverty and supporting the development of all Nigerians. He stressed the importance of “progressive democracy” as part of the government’s efforts to reduce poverty and creating mutual benefits between businesses and investors.
Elumelu said: “We believe that the additional money should be spent on combating poverty in the country and that is what the government intends to do.” He stressed the importance of ensuring that no sector pays the tax and sought a balance that would allow businesses to thrive while contributing to the greater good. Otedola, on the other hand, took a strong stance, describing the windfall tax as “long-term” and openly criticising banks for what he called a “fire culture”.
He disclosed the amount of money that some banks spend on private jets, revealing that Nigerian banks collectively spend about $50 million per year on private jet maintenance, of which more than $500 million is currently spent on the purchase of nine private jets and ‘just four’ of the banks.
Otedola criticized this trend and called on banks to return to banking values of trust, integrity and service rather than prioritizing personal gain. His views were widely echoed and led to a wider debate on the role of financial institutions in Nigeria.
Although the wind tax is controversial, it is seen by both traders as a necessary step to solve economic problems and support government efforts to create employment and develop a balanced society.
