Nigeria Wants Half of the Windfall Forex Profits at Banks.

Nigerian President Bola Tinubu has proposed a one-time 50% tax on windfall profits earned by banks due to currency gains after the devaluation of the naira. This move aims to address Nigeria's financial challenges and follows similar actions taken in Europe. The central bank had previously instructed banks to retain their gains as a buffer against potential losses. Failure to comply with the tax could result in fines for banks. The proposal has caused Nigerian bank stocks to decline. Other countries, including Italy, Hungary, and Slovakia, have also implemented special taxes on banks to address inflation and rising interest rates. Tinubu's decision to loosen foreign exchange rules in 2023 led to a significant increase in bank profits, while customers experienced losses due to the weak naira. The proposal is expected to receive support from lawmakers, who will also vote on increasing spending. [Extracted from the article]

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