Nigeria’s New Windfall Tax on Banks Faces Delays and Confusion

• Implementation of the 70% windfall tax on banks’ foreign exchange gains faces setbacks.
• Uncertainty over retroactive application and calculation methods adds to challenges.

Lagos, Nigeria – Nigeria’s recently enacted law imposing a 70% tax on windfall income earned by banks from the naira’s sharp depreciation is off to a rocky start, with implementation missing its January 1 deadline. Approved by the Senate last July as a one-off levy, the tax rate was doubled from the government’s initial proposal following parliamentary adjustments.