The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has moved to allay public fears surrounding Nigeria’s newly implemented tax reforms, stating categorically that bank account balances are not subject to taxation under the new regime.
Speaking during an interview on ARISE News on Tuesday, Enamudu said widespread misinformation about the reforms, particularly claims that savings and bank balances would be taxed, has created unnecessary anxiety among Nigerians.
“The narrative out there, which is the wrong narrative, is that the money in your bank account will be taxed. There is no provision for that in our tax laws. Nobody taxes the money in your bank account,” he said.
He explained that what applies to certain electronic transfers is a ₦50 stamp duty, not a tax on deposits or savings. According to him, the duty is triggered only when funds are transferred between individuals or accounts across financial institutions.
“When you make transfers from your account to someone else, there is a ₦50 stamp duty that applies. However, if you maintain multiple accounts within the same bank, you are not expected to pay the stamp duty,” Enamudu said.
Under the new reforms, he added, the responsibility for the charge now rests solely with the sender.
“Before now, both the sender and the receiver bore the burden of the stamp duty. But with the new tax reform, only the sender pays,” he said.
Enamudu noted that several categories of transactions are exempt, including salary-related payments and small-value transfers.
“Salary accounts and payment of salaries are exempted from stamp duty. Transfers below ₦10,000 are also exempted. Once it hits ₦10,000, you pay the ₦50 charge,” he explained.
Transfers between personal accounts held in different banks, however, still attract the duty.
“Once it crosses one financial institution to another, the stamp duty is triggered, even if it is your own account,” he said.
Addressing concerns about indirect taxes, Enamudu emphasised that essential goods and services remain exempt from value-added tax.
“You don’t pay VAT on basic food items, medicals, pharmaceuticals, education and other essentials,” he said.
He also highlighted a rent relief provision designed to ease the tax burden on tenants.
“If you pay rent as a tenant, you are allowed a relief of 20 per cent of the rent paid, subject to a maximum of ₦500,000,” he said.
Illustrating the policy, Enamudu explained:
“If your rent is ₦3 million annually, 20 per cent is ₦600,000, but the relief is capped at ₦500,000. If your rent is ₦1 million, then your relief is ₦200,000.”
On tax compliance, he said Nigeria operates a self-assessment system that requires individuals to voluntarily declare their income.
“The law envisages that you will come forward voluntarily and declare your income,” he said.
While employers remit Pay-As-You-Earn (PAYE) for workers, Enamudu noted that individuals earning income from rent or business activities must declare all sources.
“Your salary income is just one line. If you earn rent or run a business, all incomes must be aggregated and declared,” he said.
He added that state governments would apply presumptive taxation to informal sector operators such as market women.
“Market women fall under the informal sector. States will determine structures and modalities, considering the principle of economy,” he said.
Enamudu described the new tax law as deliberately structured to protect low-income earners, countering claims that it disproportionately targets the poor.
“The tax act as passed is heavily pro-poor. That is actually the reality of the act,” he said.
He clarified that the widely cited ₦800,000 threshold refers to taxable income, not gross earnings.
“It is not that if you earn ₦800,000, you don’t pay tax. The law says if your taxable income is ₦800,000 and below,” he said.
According to him, statutory deductions, including pension contributions, health insurance, National Housing Fund payments, insurance premiums, and interest on owner-occupied properties, are applied before taxable income is calculated.
“After all these deductions, if your income is still not above ₦800,000, you will not pay tax,” Enamudu said.
He confirmed that the law has already taken effect.
“The act became active on the 4th of January 2026. We are already at the implementation stage, though this is a transitional period,” he said.
Looking ahead, Enamudu said improved efficiency in tax administration would gradually broaden the tax base.
“When efficiency comes into the tax environment, more people and businesses are captured. Over time, revenue will grow, and the government will be able to meet its obligations. Government is doing a lot, but there is still room for more.”
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