By Chuks Oyema-Aziken
The Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN) says the decision to impose a 70 percent windfall tax on foreign exchange (FX) gains accrued by banks will boost government revenue to finance infrastructure projects, education and healthcare, among others.
President and Chairman of Council CITN, Mr. Samuel Agbeluyi said this at the associations’ 4th Joint Council Retreat in Abuja on Friday.
The Abuja retreat aimed to address key issues and foster unity among professionals in the accounting and taxation fields.
The National Assembly, last week, said President Bola Tinubu requested the amendment of the 2023 Finance Act to impose a one-time windfall tax of 50 percent on banks’ FX gains last year.
The CITN Chairman in his speech lamented the limited resources at the disposal of the government and said that the new tax policy will bolster national revenue amid ongoing economic challenges.
Agbeluyi also emphasised that the tax is a necessary measure to ensure a fair distribution of economic benefits, adding that banks have significantly benefited from fluctuations in the FX market.
“Windfall tax is not new. It is what is called prosperity tax. It was done when during Covid, many were at home and many activities went down and the people in the telecom did very well. So, if you did very well because of this calamity that has befallen the whole world or befallen this country, can you spare a little bit of your prosperity?” Agbeluyi said.
“The reason for taxation is for distribution of income and as a result of that distribution, the banks have done very well. We congratulate them for doing well. But, if we isolate you, and you are the only one doing well and the other business sectors are not doing well and they are declaring losses and the government allows that to continue, what will happen in another two to three years when all the companies fold up? So, let us share from your prosperity.
He said the policy will still benefit everybody “once the companies are able to thrive, tomorrow they will be able to open more businesses and this will have a direct impact on the banks and Nigeria will be great. Economy is a system. You cannot isolate one from the other And at the top level, you must have a holistic view of the whole system.
He however, urged the government to use the taxes collected judiciously for the benefit of all.
Speaking too, Dr. James Ekerare Neminebor, President and Chairman of the Council of ANAN, expressed dissatisfaction over Nigeria’s current tax structure and its impact on citizens.
Neminebor who criticised the overlapping tax responsibilities in many sectors, lauded President Bola Tinubu’s commitment to overhauling the nation’s complex tax system.
Supporting an earlier position by the CITN President on the windfall tax, Neminebor said: “Well, sometimes, like my president said, it is the distribution of wealth. if you have so much and you are paying, let it go, it’s okay. But let it not be too much for the person paying this tax.
He further opined that recent removal of withholding tax for educational facilities, like books and medical facilities for health is a good thing for the country.
During the retreat, leaders emphasized the need for a cohesive approach to enhance professional standards, underscoring that both tax consultants and accountants must operate under a unified framework to advance their practices.
It was highlighted that ANAN and CITN are working towards integrating taxation and accounting functions. The collaboration intends to streamline practices and ensure that professionals across both fields are well-prepared and certified to handle the complexities of tax and accounting work. This alignment is expected to improve the overall quality of service and foster greater trust and cooperation among professionals.
A key focus of the discussions was the enhancement of skills and competencies among practitioners. It was noted that while accountants typically start with foundational knowledge from their academic studies, ongoing professional development is crucial. ANAN’s Nigerian College of Accountancy, known for its extensive facilities and specialized programs, including French language training, plays a pivotal role in preparing accountants for both local and regional demands.
In addition to technical skills, the retreat addressed the importance of adapting to technological advancements. The integration of artificial intelligence and robotics in accounting was discussed, emphasizing that modern accountants must be adept in these areas to remain relevant in an evolving financial landscape. The need for such skills is underscored by the shift from cash transactions to digital payments.
Panel discussions also tackled policy impacts on the accounting sector. Questions were raised about the influence of current fiscal policies on Nigeria’s GDP and the significance of withholding tax exemptions for businesses. Concerns were voiced about how the removal of withholding tax could affect banks and overall revenue, with implications for fiscal policy and economic planning.
The retreat concluded with a call for greater unity and understanding among professionals. By aligning their efforts and expertise, ANAN and CITN aim to drive progress and elevate the standards of accounting and taxation practices in Nigeria. The collaboration is seen as a crucial step towards achieving long-term professional and economic goals.
