Nigerian Banks Pay N205.6 Billion in Windfall Taxes
Nigerian banks have collectively paid approximately ₦205.6 billion in windfall taxes, following the federal government’s introduction of a tax targeting their foreign exchange (FX) gains.
The tax, which has sparked significant debate, applies retroactively from June 14, 2023, to December 31, 2025, and was recently increased from 50% to 70% by the Senate.
The move aims to generate revenue for critical infrastructure, education, and healthcare projects. However, reports indicate that banks still owe the government an estimated ₦600 billion, falling short of the expected ₦1 trillion in windfall tax revenue.
Financial data reveals that GTBank has paid ₦51.25 billion, while Stanbic IBTC and Fidelity Bank have contributed ₦17.18 billion and ₦13.33 billion, respectively. Several other banks are also making significant payments, as financial statements continue to reveal the extent of their obligations.
The introduction of the windfall tax has been met with mixed reactions. Critics argue that its retrospective application undermines investor confidence and places undue financial strain on banks. Moody’s, a global credit rating agency, has warned that the tax could negatively impact banks’ financial stability, especially those operating near regulatory capital adequacy limits.
Conversely, government officials and supporters of the tax believe it is a necessary measure to ensure that banks contribute fairly to national development, particularly in light of their substantial FX gains following the naira’s devaluation.
As the tax remains a hotly debated issue, its long-term effects on Nigeria’s banking sector and broader economy remain uncertain. Industry experts predict further negotiations between banks and the government as the financial sector grapples with the impact of this unprecedented levy.
