The Executive Chairman of Federal Inland Revenue Service, Zacch Adedeji said the Service decided to spare companies in the manufacturing industry of tax payments due to N1.7 trillion losses they incurred on account of the incumbent government’s policy on foreign exchange.
The unification of exchange rate has futher devalued the naira against hard currencies
It resulted in higher cost of production for companies dependent on importation of raw materials and machines.
Appearing before the National Assembly Joint Committee on Finance, against the backdrop of Federal Government’s proposed one-off levy on the 2023 foreign exchange (forex) windfall by banks, Adedeji made case for the proposal saying, “It’s not that we are going after the profit but recovering the losses incurred by the activities as a result of their own ineptitude, bringing a policy to correct the policy decision. Everybody realised that it is not their money, money earned in the normal course of your business.”
The FIRS boss explained that the manufacturing sector has made N1.7 trillion loss as a result of the forex and based on that, the agency cannot tax them.
In a circular issued in March, the CBN directed commercial banks in the country not to touch or spend the profits they made from foreign exchange transactions.
The government is pushing for a 50-50 sharing formula with the banks with defaulters liable to go to jail once the proposed bill becomes law.
