Bank Directors Association of Nigeria (BDAN) has expressed concerns over the recently introduced 70% windfall tax on banks’ foreign exchange earnings, urging the federal government to reconsider the move. The tax, which was increased from the initially proposed 50%, has raised worries about its timing and potential impact on the banking sector’s growth and innovation.
BDAN Chairman Mustafa Chike-Obi described the levy as “excessively burdensome and ill-timed,” highlighting the need for greater consultation and dialogue between the government and stakeholders. He emphasized that the high tax rate could stifle growth, affect financial services, and ultimately harm the broader economy.
The association also pointed out ambiguities in the tax’s implementation, seeking clarifications on what constitutes “FX transactions” and the treatment of banks that may incur losses. BDAN stressed that Nigerian banks are already heavily taxed globally and urged the government to consider consolidating taxes and levies to alleviate the sector’s burden.
BDAN called for constructive discussions with stakeholders to develop a framework that balances revenue generation with the need for a thriving banking environment, supporting sustainable economic growth. The association remains committed to collaborating with regulators, government entities, and other stakeholders to find mutually beneficial solutions.
