The National Assembly on Wednesday passed for second reading an Executive Bill seeking to tax the windfall made by banks from foreign exchange business.
The bill is an amendment to the Finance Act of 2023.
The one-time tax will be used to finance capital infrastructure development, education, healthcare and other welfare initiatives, according to the Federal Government.
Another Executive Bill which scaled the second reading seeks to increase the 2024 Appropriation Act by N6.2 trillion.
Senate President Godswill Akpabio and Speaker Abbas Tajudeen read a letter from President Bola Tinubu during plenaries in both chambers.
The President sought to increase the 2024 budget to N34.9 trillion from the N28.7 trillion signed on 1 January.
The amendment is to provide for an additional N3.2 trillion for projects and N3 trillion for recurrent expenditure.
The President’s letter reads: “Pursuant to Section 58 (2) of the Constitution of the Federal Republic of Nigeria as amended, I forward herewith the above-named Bills for consideration and passage.
“The Appropriation Act Amendment Bill seeks to amend the principal Act to provide the sum of N3.2trillion for Renewed Hope Infrastructure Projects and other critical infrastructure projects to be undertaken across the country and the sum of N3trillion to meet further recurrent expenditure requirements necessary for the proper operation of the Federal Government.
“They shall be funded by funds accruing to the Federal Government of Nigeria”.
President Tinubu also asked the lawmakers to amend the Finance Act of 2023 to tax windfalls by banks from foreign exchange.
“Furthermore, the proposed amendments to the Finance Acts 2023 are required for a one-time windfall tax on the foreign exchange gains realised by banks in their 2023 financial statements to fund capital infrastructure development, education, and healthcare as well as welfare initiatives, all of which are components of the Renewed Hope Agenda”, he stated.
Both chambers suspended their relevant rules and passed the Bills for first and second reading.
They referred them to the relevant standing committees for further legislative action.
The proposal was entitled: “A Bill for an Act to Amend the Appropriation Act, 2024 to authorise the issue from the Consolidated Revenue Fund of the Federation the total sum of N3.2 trillion only is for Capital Expenditure and the sum of N3trillion only is for recurrent expenditure for the year ending on the 31st day of December 2024 (HB. 1610)”.
Also, the Bill for an Act to amend the Finance Act 2023 to impose and charge Windfall Tax on Banks and provide for the Administration, scaled second reading.
In his head debate, Senate Leader, Opeyemi Bamidele said the N3.2 trillion is for capital expenditure, while N3 trillion is for recurrent expenditure, to be spent before the end of 2024.
Deputy Senate President Barau Jibrin said part of the additional funds sought would be used to finance the minimum wage which is expected to arrive in the National Assembly before the end of July.
Senator Adamu Aliero (PDP – Kebbi Central) said the amendment would create an opportunity for funding critical projects not captured in the principal Act.
Senator Seriake Dickson differed, saying the Senate should not pass the bills in a hurry to avoid pitfalls.
He recalled the backlash from the public over a bill he said was previously passed hastily, noting that legislators should avoid public ridicule in the handling of legislative activities.
Dickson also disagreed with suggestions that the amendment to the Appropriation Act, 2024 and the amendment to the Finance Act, 2023, be lumped together.
He said: “I don’t believe we should lump the two bills together. I suggest that we step the Finance Bill down.
“Let it not be that we pass them without the experts and critical stakeholders participating in public hearings.
“I think that we should be very cautious when we are discussing taxation and even these banks we intend to generate N500 billion from are all running around to meet recapitalisation. These are two critical bills”.
Senators approved that the Bills be read for a second time when Barau, who presided over the plenary, called for a voice vote.
Barau referred the Bill on the amendment to the 2024 Appropriation Act to the Senate Committee on Appropriation.
The one to amend the Finance Act 2023 was forwarded to the Committee on Finance for further legislative action.
The committees are to revert in a week.
