BDC operators request exemption of excise taxes on forex transactions 

Excise duty is a tax charged on manufactured goods, levied at the time of manufacture.

In a request at the House of Representatives’ Public Hearing on the Tax Reform Bill in Abuja on Thursday, ABCON President, Aminu Gwadabe said excise tax on foreign exchange transactions would exacerbate exchange rate volatility in the market if applied to licensed bureaux.

Represented by the Chairman of the North Central Zone, Thomas Okoye, Gwadabe urged lawmakers to exempt excise taxes on transactions by licensed and regulated Bureaux De Change (BDCs) to avoid over-generalizations, adding that the policy lacks clarity.

“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.

He also warned that excise tax on foreign exchange transactions would lead to unemployment.

The BDC operators revealed that there is a significant forex inflow coming into the interbank window, with growing investor confidence and substantial portfolio investments entering the banks.

The apex bank had introduced a revised guideline in December 2024, permitting licensed BDC operators to purchase foreign exchange directly from Authorized Dealers as part of its move to streamline Nigeria’s forex market and enable the naira to reflect its true value.

Gwadebe, who acknowledged that the FX market is improving, stated that many of the banks have started the implementation of direct forex sales to the licensed BDCs, which has significantly impacted the forex market.