Tinubu Seeks Additional N6.2 Trillion for 2024 Budget, Proposes Windfall Tax on Banks

• President Bola Tinubu has asked the National Assembly to amend the 2024 budget, seeking an additional N6.2 trillion. This increase includes N3.2 trillion for capital expenditure and N3 trillion for recurrent expenditure, raising the total budget to N34.9 trillion.
• Tinubu also proposed amendments to the Finance Act 2023 to impose a windfall tax on banks, targeting their extraordinary profits. This move aims to enhance national revenue and improve tax administration efficiency.
• The bills were quickly introduced in the House of Representatives, passing first and second readings without debate, and were referred to the House Committee on Appropriations for further action. These proposals reflect the government’s focus on infrastructure development and fiscal management amidst economic challenges.

Tinubu Seeks Additional N6.2 Trillion for 2024 Budget, Proposes Windfall Tax on Banks

Abuja, Nigeria – President Bola Tinubu has formally requested the National Assembly to amend the 2024 Appropriation Act, proposing an increase of N6.2 trillion to the budget.

In addition, he seeks to amend the Finance Act 2023 to impose a windfall tax on banks and address related tax administration matters.

The President’s requests were communicated through letters read by Senate President Goodwill Akpabio and Speaker of the House of Representatives Abbas Tajudeen during Wednesday’s sessions in both chambers of the National Assembly.

Budget Increase Request

In November, according to Premium Times, President Tinubu presented a N27.5 trillion budget for 2024 to a joint session of the National Assembly. Subsequently, the budget was increased by N1.2 trillion, bringing it to a total of N28.7 trillion.

Tinubu’s new request aims to further amend the 2024 Appropriation Act by adding N3.2 trillion for capital expenditure and N3 trillion for recurrent expenditure.

The President indicated that these additional funds would come from the Consolidated Revenue Fund of the Federation.

In his letter, Tinubu outlined the necessity of the budget increase:

“Pursuant to section 58, sub-section two of the Constitution of the Federal Republic of Nigeria 1999 as amended, 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 are to be funded by expected revenue accruing to the Federal Government of Nigeria.”

If approved, this amendment will raise the 2024 budget to N34.9 trillion.

Windfall Tax Proposal

In addition to the budget amendment, President Tinubu is pushing for changes to the Finance Act 2023 to impose a windfall tax on banks.

The proposed tax aims to capture extraordinary profits made by banks, ensuring that a portion of these profits contributes to national revenue.

The amendments also seek to enhance the efficiency of tax administration and address related issues.

Legislative Response

The bills were swiftly introduced in the House of Representatives, undergoing first and second readings without debate, and referred to the House Committee on Appropriations for further legislative action.

Both requests were listed as executive bills on the Senate’s Order Paper for consideration on Wednesday.

Background and Implications

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The proposed amendments come in the wake of ongoing economic challenges and the government’s efforts to bolster infrastructure development and manage recurrent expenditures effectively.

The extension of the capital component of the 2023 budget and the N2.17 trillion 2023 supplementary budget until December 31 highlights the government’s focus on continuous funding for critical projects.

The introduction of a windfall tax on banks aligns with global practices where extraordinary profits, particularly those arising from unexpected or short-term economic conditions, are taxed to ensure equitable distribution of wealth and bolster public finances.

As the National Assembly deliberates on these proposals, the focus will be on balancing the need for increased funding with the broader economic implications for both the public sector and financial institutions.

The outcome of these legislative actions will significantly impact Nigeria’s fiscal landscape in 2024, shaping the government’s ability to deliver on infrastructure promises and manage its financial commitments.