Six Banks Pay N205.6 Billion, Falling Short of N1 Trillion Target
According to audit reports, six Nigerian banks collectively paid N205.6 billion in windfall tax for 2024. The payment remains significantly lower than the federal government’s projected N1 trillion target.
Audit Reports List Banks That Have Paid the Tax
Audit filings with the Nigerian Exchange Limited confirmed payments from Zenith Bank, UBA, Fidelity Bank, Wema Bank, Stanbic IBTC, and GTCO. Stanbic IBTC Holdings and GTCO serve as parent companies for Stanbic IBTC Bank and Guaranty Trust Bank.
Zenith and UBA Lead in Windfall Tax Contributions
Zenith Bank paid the highest windfall tax at N63.31 billion, followed closely by UBA with N57.91 billion in total contributions. UBA’s audit report disclosed that its payment covered financial years 2023 and 2024, totaling N57.91 billion.
Breakdown of UBA’s Windfall Tax Contribution
UBA’s windfall tax payment consisted of N24.819 billion for 2023 and N33.092 billion for 2024, according to audit reports. The sum was determined after engagements with the Federal Inland Revenue Service on reconciliations and financial reporting.
GTCO, Stanbic IBTC, and Fidelity Also Make Payments
GTCO paid N51.25 billion in windfall tax, while Stanbic IBTC Holdings contributed N17.18 billion to the Federal Government. Fidelity Bank paid N13.33 billion, of which N5.71 billion was attributed to financial gains realized in 2023.
Windfall Tax Imposed on FX Gains from Naira Devaluation
The windfall tax imposes a 70 percent levy on foreign exchange gains realized from currency floating by the CBN. This levy applies retrospectively to financial years 2023, 2024, and 2025, significantly impacting banks’ capital reserves.
Bank CEOs Lobby Presidency to Reduce Windfall Tax
There are speculations that bank executives are lobbying the Nigerian presidency to negotiate a reduction in windfall tax payments. Sources suggest that banks are concerned about the impact of the tax on liquidity and operational sustainability.
Moody’s Warns of Negative Impact on Banks’ Capital Adequacy
Global ratings agency Moody’s has expressed concerns about the adverse impact of the windfall tax on Nigerian banks. In its report, Moody’s highlighted that banks with capital adequacy near regulatory limits could face financial strain.
Moody’s Links Windfall Tax to 2023 Currency Devaluation
Moody’s report emphasized that Nigerian banks recorded high profits in 2023 due to foreign exchange revaluation gains. The 37 percent naira devaluation in June 2023 significantly contributed to these foreign exchange gains and subsequent tax obligations.
