Tinubu moves to tap bank earnings

Nigerian President Bola Tinubu plans to slap a one-off 50% tax on windfall profits booked by banks on massive currency gains after the naira was devalued last year. A report on the Head Topics site notes that the move comes as Nigeria tries to prop up public finances amid a cost-of-living crisis and follows similar efforts in Europe to tap bank earnings padded by high interest rates. Nigeria’s central bank has already told lenders to hang on to hefty gains they booked after Tinubu loosened foreign exchange rules, triggering the naira’s slump, cautioning they should be held as a buffer against losses. The naira is currently trading around 70% lower against the dollar prior to its level before the rules were relaxed in June 2023. The 50% tax will be applied to the 2023 financial year and banks who fail to comply face fines. The report notes that lawmakers are expected to support the measure.