The Bank Directors Association of Nigeria (BDAN) has strongly condemned the federal government’s proposed 70% windfall tax on profits generated from foreign exchange transactions, calling it “excessive” and “ill-timed”. The association, led by Chairman Mustafa Chike-Obi, expressed concerns about the high rate of the tax, its potential negative impact on bank growth and innovation, and the lack of stakeholder consultation before its enactment.
In a statement, the BDAN urged the National Assembly to revisit the amendment and engage in dialogue with the banking sector to ensure the policy supports both revenue generation and a healthy banking industry. The association argued that the tax, which is part of the government’s efforts to boost revenue, could undermine the ongoing recapitalization efforts of banks and limit their ability to support economic growth.
The BDAN’s criticism comes at a time when the banking sector is already facing challenges, including the impact of the COVID-19 pandemic and the need to adapt to new technologies and customer preferences. The association believes that the proposed tax, if implemented, could further strain the industry and discourage investment in critical areas such as digital banking and financial inclusion.
The BDAN’s call for a review of the tax has been echoed by other stakeholders in the banking and finance industry, who are concerned about the potential consequences of the policy on the overall economic landscape. As the National Assembly considers the amendment, it remains to be seen whether the government will heed the concerns raised by the BDAN and other industry players and find a balanced approach that supports both revenue generation and the growth of the banking sector.