BDCs Call for Exemption of Excise Tax on Foreign Exchange Transactions

• The Association of Bureau De Change Operators asked that excise fees be removed from foreign exchange transactions
• Excise duty is a tax that is applied to manufactured items at the time of manufacture
• ABCON president prayed that excise charges on transactions Bureaux De Change would be eliminated by the legislature

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

ABCON, the Association of Bureau De Change Operators, requested on Thursday, February 27th that foreign exchange transactions be free from excise taxes.

The News Agency of Nigeria (NAN) states that excise duty is a tax imposed at the time of manufacture on produced goods.

Alhaji Aminu Gwadabe, its president, made the proposal during the public hearing on the tax reform bill held by the House of Representatives in Abuja.

In order to prevent oversimplifications, Gwadabe, through Mr. Thomas Okoye, Chairman of the North Central Zone, prayed that the lawmakers would remove excise taxes on transactions by licensed and controlled Bureaux De Change (BDCs).

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Gwadabe cautioned that imposing an excise tax on foreign exchange transactions on regulated bureaux would increase market exchange rate volatility.

“The policy lacks clarity as the excise tax is on parallel market activities.

“It will be transferred to end users; it would worsen inflation as we depend highly on importation,” he said.

The president of the BDC also cautioned that unemployment would result from an excise tax on foreign exchange operations.

Additionally, Gwadabe requested a review of the new capital finance requirements for BDC licensing set by the Central Bank of Nigeria (CBN), which are two billion naira and five hundred million naira.

Bashir Adeniyi, the Comptroller-General of Customs, also spoke and called for tighter cooperation with the Nigeria Export Processing Zones Authority (NEPZA).

Such cooperation will improve the effectiveness of the oversight and control of the flow of commodities into Nigeria, according to Adeniyi.

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The House of Representatives' three-day public hearing on the tax reform bill is already over, according to NAN.

Earlier Aminu Gwadebe, president of the Association of Bureau de Change Operators of Nigeria, said very few banks have followed the Central Bank of Nigeria's order to sell dollars to BDCs.

Gwadebe, who stated this in an exclusive interview with Punch, examined the naira's strong performance in the parallel market over the previous week.

Earlier, the CBN temporarily allowed Bureau de Change operators to buy foreign currency from the Nigerian Foreign Exchange Market last December according to report.

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Legit.ng reported that Aminu Gwadebe, president of the Association of Bureau de Change Operators of Nigeria, said very few banks have followed the Central Bank of Nigeria's order to sell dollars to BDCs.

Gwadebe, who stated this in an exclusive interview with Punch, examined the naira's strong performance in the parallel market over the previous week.

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Earlier, the CBN temporarily allowed Bureau de Change operators to buy foreign currency from the Nigerian Foreign Exchange Market last December.

Source: Legit.ng