Expert Backs Federal Government’s Levy On Forex Profits

Expert Backs Federal Government’s Levy On Forex Profits....KINDLY READ THE FULL STORY HERE▶

A Professor of Economic History at Obafemi Awolowo University, Ile Ife, Adetunji Ogunyemi, has expressed strong support for the National Assembly’s proposed amendment to the Finance Act 2020, which aims to introduce a windfall levy on banks’ profits from foreign exchange transactions…….. CONTINUE READING 

Ogunyemi, a legal and public finance expert, suggested that banks should view this levy as a positive contribution towards national development. Despite ongoing debate about the potential economic strain this levy might impose on the financial sector, the Federal Government argues that the tax is necessary to balance key economic sectors.

In a Saturday interview, Ogunyemi highlighted Nigeria’s pressing financial issues and affirmed the government’s right to implement policies that generate additional revenue to address the country’s financial needs. He stated, “Nigeria is currently facing severe financial difficulties. The government, according to its constitutional powers, is entitled to enact laws and policies that promote stability and good governance.”

He continued, “Given the current financial strain and the fact that some entities have profited significantly without substantial productive contributions, it is reasonable for the Federal Government to ensure a more equitable distribution of resources through economic stabilization measures.”

Ogunyemi supported the Finance Act 2020 amendment, describing the proposed windfall levy as a justified effort to stabilize the economy and redistribute wealth. He refuted claims from the Chartered Bankers Institute of Nigeria that this levy constitutes double taxation, arguing instead that banks already engage in questionable charges, such as ATM withdrawal fees, which have not been addressed by the Central Bank of Nigeria.

The professor emphasized that the Central Bank’s tolerance of these practices might be aimed at ensuring banks’ financial stability for future recapitalization needs, underscoring that banks should not be allowed to benefit excessively from their position.