President Bola Ahmed Tinubu has requested the Senate to amend the 2024 Appropriation Act and the 2023 Finance Act by increasing the budget with ₦6.2 trillion as well as levying more tax on bank profits.
Tinubu made the request via a letter to Senate President Godswill Akpabio, and read at plenary on Wednesday.
He had on January 1, 2024, assented to the N28.7 trillion 2024 Appropriation Bill passed by the Senate.
The President in the letter, said the move was pursuant to Section 58(2) of the Constitution of the Federal Republic of Nigeria 1999 as amended.
Tinubu’s letter read: “I forward herewith the above Bills for consideration and passage by the Senate.
“The Appropriation Act Amendment Bill 2024 seeks to amend the principal Act to provide the sum of N3.2 trillion for Renewed Hope infrastructure projects and other critical infrastructure projects to be undertaken across the country.
“And the sum of N3 trillion to meet further recurrent expenditure requirements, necessary for the proper operation by the Federal Government expenditure, which is to be funded by expected revenue accruing to the Federal Government of Nigeria.”
Tinubu added that the proposed amendments to the Finance Act 2023 were required to impose a one-time windfall tax on the foreign exchange gains realised by banks in their 2023 financial statements.
He explained that this was to fund capital infrastructure development, education, healthcare access, and public welfare initiatives.
According to the President, all of the projects are essential components of the renewed hope agenda of the administration.
Tinubu had on January 1, 2024, assented to the N28.7 trillion 2024 Appropriation Bill passed by the Senate.
On May 29, 2024, the President said he would present the 2024 Supplementary Budget to the National Assembly (NASS).
As of the time of filing this report, the Bill to Amend the Appropriation Act, 2024 to authorize the issue from the Consolidated Revenue Fund of the Federation the total sum of ₦3.2 trillion for Capital Expenditure, and the sum of ₦3 trillion for recurrent expenditure for the year ending on the 31st day of December 2024, has scaled 2nd reading in the House of Representatives.
Similarly, the Bill for an Act to Amend the Finance Act, 2023 to impose and charge Windfall Tax on Banks and Provide for the Administration of the Tax has also scaled 2nd reading.
The Senate on Wednesday backed President Bola Tinubu’s requests to amend the 2024 budget by N6.2 trillion and to amend the 2023 Finance Act to “impose and charge windfall tax on banks” for their foreign exchange operations.
The budget amendment Bill, which passed second reading, made a provision of N3.2tn for capital projects under the President’s ‘renewed hope infrastructure projects.’
It also made a provision of N3tn for recurrent expenditure to capture the proposals for new national minimum wage expected to be laid before the National Assembly soon.
But, Deputy President of the Senate, Sen. Barau Jibrin, who presided over the session, kept insisting that the amendment Bill was not a 2024 supplementary budget.
“It is an amendment, not a supplementary budget. It is just to move funds from here to there and other such things”, Jibrin interjected as senators debated the two Bills on the floor in Abuja.
He also stated that the two Bills were meant to address critical projects and the minimum wage.
While leading the debate on the Bills, Senate Leader, Sen. Opeyemi Bamidele (APC, Ekiti-Central), said among the renewed hope infrastructure projects were the Lagos-Calabar coastal road and the Lagos-Badagry expressway.
On the minimum wage, Bamidele explained that there was no provision for it in the 2024 budget, a reason it became necessary to plan for it before the Bill was brought to the legislature.
He also said the Finance Act, 2023 was being amended to provide funding for the amendments and the minimum wage.
Chairman, Senate Committee on Finance, Sen. Sani Musa (APC, Niger-East), in defending the plan to tax the profits of banks, said the banks had made more money lately, taking advantage of the administration’s foreign exchange policies.
He stated, “The end-of-year reports of the banks tripled, despite the high interest rates. How are they making this money?
“They should be taxed to contribute to infrastructure development in this country.
“I believe taking a small percentage out of that profit to contribute to our economic development is not bad.
“I am in full support that we should look at the books of the banks in terms of their profitability in foreign finances.”
Sen. Adetokumbo Abiru (APC, Lagos-East), who chairs the Senate Committee on Banking, Insurance and other Financial Institutions, also gave his full support to the amendment of the budget and the Finance Act.
“The profits of the banks must have come from the liberalisation of the foreign exchange market and the policies of the current administration. So, it’s not out of place to ask the banks to contribute some funding to the running of our economy”, Abiru added.
However, Sen. Seriake Dickson (PDP, Bayelsa-West), cautioned against what he termed the hasty amendments to the Finance Act, saying that the Senate must not pass laws that would later be non-implementable.
He argued that a government must not continue “to tax our citizens, whether corporate or otherwise.”
The former Bayelsa Governor added, “We are talking about taxing the profits of banks, which will be a serious issue. We should step down the Bill and have the benefits of expert opinions on it.”
Dickson recalled how the National Assembly passed a similar Bill for more taxes by telecommunications operations through the Office of the National Security Advisor, adding that though the law was signed, it had to be quickly withdrawn due to public outcry.
But, voting upon conclusion of the debate, the majority of senators endorsed the passage of the two Bills for a second reading.
