The Federal Government of Nigeria is seeking to tax the realised profits from all foreign exchange transactions of banks in the 2023 financial year. This measure is contained in the Finance (Amendment) Bill 2024. The Bill provides for a one-off tax of 50% on such realised profits. The Federal Inland Revenue Service (FIRS) will assess and collect the amount due though the banks have the option to settle the windfall tax in instalments.
However, the FIRS must approve such instalment plan on or before 31 December 2024. Where a bank has not executed an instalment plan or paid the additional tax due, such bank will be guilty of an offense and shall, on conviction, be liable to pay the tax due plus a penalty of 10% per annum and interest at the prevailing Central Bank of Nigeria's minimum rediscount rate. The principal officers of such defaulting bank may also face imprisonment for a period of not more than 3 years.
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