The New Dimension Shareholders Association of Nigeria is very unhappy with the Nigerian Government’s plan to add a big 50% tax on banks because they made money from foreign exchanges.
President Bola Tinubu suggested changing the law to make banks pay a 50% tax on the money they got from foreign exchanges for the entire year of 2023.
This idea needs the Senate’s approval and is causing a lot of arguments among people who care about it.
In a letter to the Senate, President Tinubu said the money from this tax would be used to build roads, schools, hospitals, and help the public.
How Banks Are Doing Financially
Mr. Patrick Ajudua, the President of the New Dimension Shareholders Association (NDSA), told Newslodge that this tax idea is not fair. He believes it tries to hurt the good financial work the banks have done, especially when times are tough.
Ajudua thinks this tax would take away a lot of money from the bank shareholders.
“The government’s decision to add a windfall tax on banks because of forex gains is very unfair. It tries to break down the banks’ good financial performance in these difficult times, and it would reduce shareholders’ funds.”
Ajudua and his group want the government to stop this plan immediately. He said the forex gains happened because the naira lost value. Since no real money moved, the Central Bank of Nigeria told banks not to use these gains to pay dividends.
“As bank shareholders, we strongly oppose this unfair plan and want it stopped now.”
“Why would the government want to tax these gains? It is both unfair and wrong,” he said.
Shareholders Might Fight This Tax
Ajudua warned that if the government keeps pushing this tax, the shareholders might go to court.
He suggested the government find other ways to get money instead of using these funds.
He said using these funds for building projects is not a good idea. It reminds him of earlier bad plans to use pension funds for similar purposes.
“The government needs to find other ways to fund its expenses. Using this money for building bridges and roads is a bad idea, just like trying to use pension funds before.”
Problems with Foreign Exchange
To fix issues with foreign exchange and make Nigeria more attractive to foreign investors, Ajudua suggested the government should focus on better oil production.
He also said the government should use resources wisely and build local industries to ease pressure on the naira and keep it stable.