The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Mr. Ben Enamudu, has dismissed claims that Nigeria’s new tax law imposes charges on money kept in bank accounts.
Enamudu said the new tax regime does not tax bank deposits or account balances, explaining that only certain electronic transfers attract a ₦50 stamp duty.
Speaking during an interview on ARISE News on Tuesday, he said misinformation surrounding the reforms has created unnecessary fear 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,” Enamudu said.
According to him, the ₦50 charge applicable to some transfers is a stamp duty and not a tax on savings or balances.
“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,” he explained.
He added that under the new law, only the sender bears the cost of the stamp duty.
“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 transactions are exempted, including salary payments and transfers below ₦10,000.
“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 stated.
He clarified that transfers between accounts held in different banks, even if owned by the same individual, still attract stamp duty.
“Once it crosses one financial institution to another, the stamp duty is triggered, even if it is your own account,” he said.
On Value Added Tax (VAT), Enamudu said essential goods and services remain exempt.
“You don’t pay VAT on basic food items, medicals, pharmaceuticals, education and other essentials,” he said.
He also disclosed that tenants now enjoy rent relief under the new tax law.
“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.
Explaining further, he said, “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, Enamudu said Nigeria operates a self-assessment system.
“The law envisages that you will come forward voluntarily and declare your income,” he said.
While employers remit Pay-As-You-Earn (PAYE) taxes for workers, he noted that individuals with other income sources must file returns themselves.
“Your salary income is just one line. If you earn rent or run a business, all incomes must be aggregated and declared,” he added.
He said states would rely on presumptive taxation for informal sector operators, including 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 pro-poor, stressing that low-income earners are protected.
“The tax act as passed is heavily pro-poor. That is actually the reality of the act,” he said.
He clarified that the widely discussed ₦800,000 threshold applies 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 explained.
According to him, statutory deductions such as pension contributions, NHIS, National Housing Fund, insurance premiums and interest on owner-occupied homes are removed before determining taxable income.
“After all these deductions, if your income is still not above ₦800,000, you will not pay tax,” he said.
Enamudu confirmed that the law took effect on January 4, 2026.
“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.
He added that improved efficiency would gradually expand the tax base and boost government revenue.
“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,” he said.
