I Highly Support FG’s Windfall Tax Policy – Femi Otedola

Billionaire businessman, Femi Otedola, has said the federal government’s Windfall Tax policy would help to ensure equitable distribution of wealth in Nigeria.

The Executive Chairman of Geregu Power PLC said the Windfall tax policy of the federal government showed ethical leadership from the current administration.

On his X handle on Thursday, Femi Otedola said the tax on banks from their profits would help in the health, education and infrastructure development of the country.

He said, “I highly support the implementation of a windfall tax in Nigeria and to highlight the critical role this measure plays in fostering a fairer and more equitable economic environment.

“My stance aligns with the ongoing efforts to reform the Nigerian banking sector, aimed at enhancing economic stability and integrity within our financial institutions.

“Windfall taxes are levies on companies or individuals who receive substantial, unexpected profits due to circumstances beyond their usual control or investment. Taxing these extraordinary gains ensures a fairer distribution of wealth, allowing those who benefit disproportionately to contribute more significantly to the broader societal good.

“The revenue generated from windfall taxes can be channeled into essential public services such as healthcare, education, and infrastructure, benefiting all citizens and helping to reduce social inequalities.

“The recent announcement of a windfall tax on the extraordinary profits earned by Nigerian banks is a significant first step towards achieving these goals. The consolidation of various foreign exchange rate systems into a single investors and exporters (I&E) window led to the depreciation of the Naira and substantial increases in the value of bank assets denominated in United States Dollars.”

Otedola explained that the current policy would empower banks to play roles in the country’s development.

He further advised the federal government to ensure the tax is invested in critical sectors of the economy for development.

“This extraordinary gain should be redistributed to fund critical infrastructure development, education, healthcare access, and public welfare initiatives, addressing the intense pressure on public finances and alleviating the cost-of-living crisis many Nigerians face.

“Furthermore, the financial statements of manufacturing, telecoms, and SMEs indicate that many of these companies may not be able to pay corporate tax for at least the next two years, as they are currently showing negative equity. It is essential for the government to step in and provide support to bridge these gaps, ensuring revenue generation and fostering economic development.

“The importance of aligning financial priorities with Nigeria’s broader economic development goals cannot be overstated. The Federal Government’s reforms are both timely and essential for the sustainable growth of our economy.

“By taking decisive action to implement these changes, the Federal Government is demonstrating a commitment to ethical leadership and accountability. These reforms will empower our banking sector to play a pivotal role in driving Nigeria’s economic development, ultimately securing a prosperous future for all Nigerians,” he explained.