‘It’ll alleviate poverty’ — Tony Elumelu backs windfall tax on banks’ FX gains

Tony Elumelu, chairman of the United Bank of Africa (UBA), says he supports the implementation of the federal government’s windfall tax on the foreign exchange (FX) gains of banks.

A windfall tax is a higher tax imposed by the government on sectors or businesses that have benefitted from favourable market conditions.

Elumelu spoke on Wednesday while Nigeria’s banking sector representatives met formally with President Bola Tinubu at the State House in Abuja.

The meeting was to seek clarifications on the windfall tax.

On July 17, Tinubu asked the national assembly to amend the 2023 Finance Act to impose a one-time windfall tax on banks’ FX gains.

However, the national assembly increased the windfall tax on banks’ FX gains to 70 percent — from the proposed 50 percent — in the amended Finance Act of 2024.

The decision had raised concerns among professionals in the financial industry.

Speaking at the meeting, Elumelu expressed his support for the government’s windfall levy.

He said the move was aimed at alleviating poverty.

The businessman also said there was a need to “democratise prosperity for Nigerians, ensuring access to a good life for all”.

“We believe that where extraordinary income has been made, it should go towards helping to alleviate poverty in the country, which is what the government intends to do,” he said.

“We support that and we just believe that we should make sure that no one segment suffers and that the government is able to continue to create jobs and that businesses are also able to do well because we need mutual prosperity.

“Prosperity of the business owners, prosperity of the ordinary, Nigerians perspective of the investors – foreign and local, so that everyone is happy. So I’m happy about that. This has gone very well.

“The ultimate objective is to make sure that we create a perspective for everyone in Nigeria and that has been achieved in the meeting and we hope to see a better and happier society going forward.”

Elumelu further said the importance of mutual prosperity is where businesses thrive, jobs are created, and investors (both foreign and local) benefit, ultimately leading to a happier society.

Also, on July 31, Femi Otedola, chairman of First Bank of Nigeria (FBN) Holdings, backed the federal government’s windfall tax, saying taxing the extraordinary gains ensures a fairer distribution of wealth.