FG May Impose Excise Tax On Parallel Market Transactions Over Forex Crises

The federal government may soon begin the imposition of excise tax penalties on foreign exchange transactions done outside the official market window as part of the moves to discourage multiple exchange rates in the country.

VerseNews reports that this is one of the twenty recommendations put forward by the Presidential Fiscal Policy and Tax Reform Committee, established by President Bola Tinubu in July to evaluate and provide guidance on reforms aimed at shaping Nigeria’s fiscal policy and tax system.

The Tax Committee, led by Taiwo Oyedele, proposed a set of “quick win” recommendations.

These recommendations aim to tackle urgent economic concerns, such as exchange rate management, the consequences of removing fuel subsidies, controlling inflation, and promoting economic growth.

One of these suggestions is the introduction of an excise tax on foreign exchange transactions that occur outside the official market.

Taking to his X (Twitter) account, Oyedele highlighted the key developments from their findings presented to the President.

According to Oyedele, “Imposition of excise tax on foreign exchange transactions outside the official market” is part of what was proposed to the federal government.”

Highlighting some other developments that may be implemented in the foreign exchange market, Oyedele stated the recommendations are meant to promote transparency, encourage ease in business transactions as well enforce the single exchange rate system in the sector. The recommendations include,

“Permit the payment of taxes on foreign currency-denominated transactions in Naira for Nigerian businesses.

Digitalise Nigeria’s fx regime and discourage speculative demands and hoarding of fx in cash.

“Discontinue the fx verification portal and requirement for Certificate of Capital Importation and export proceeds restriction.”