The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Mr. Ben Enamudu, has dismissed widespread claims that Nigerians’ bank balances are being taxed under the new tax regime, clarifying that only certain electronic transfers attract a ₦50 stamp duty.
Speaking during a televised interview on Tuesday, Enamudu said misconceptions surrounding the reforms—particularly claims about taxation of savings and income thresholds—have created unnecessary anxiety among the public.
He stressed that Nigerian tax laws do not provide for taxation of money held in bank accounts.
“There is a wrong narrative out there that the money in your bank account will be taxed. There is no such provision in our tax laws. Nobody taxes your bank balance,” he said.
According to him, the ₦50 charge applied to some electronic transfers is a stamp duty, not a tax on deposits or savings.
“When you transfer money from your account to another person, a ₦50 stamp duty applies. However, if you operate multiple accounts within the same bank, no stamp duty is charged,” he explained.
Enamudu noted that the new reforms also clarify who bears the cost of the stamp duty.
“Previously, both the sender and the receiver shared the burden. Under the new regime, only the sender pays the ₦50 stamp duty,” he said.
He added that several transactions are exempt from the charge, including salary payments and low-value transfers.
“Salary accounts and salary payments are exempt from stamp duty. Transfers below ₦10,000 are also exempt. Once the transfer is ₦10,000 and above, the ₦50 charge applies,” he said.
He further clarified that transfers between personal accounts held in different banks still attract stamp duty.
“Once the transfer moves from one financial institution to another, the stamp duty is triggered, even if the accounts belong to the same individual,” he said.
On value-added tax (VAT), Enamudu reaffirmed that essential goods and services remain exempt.
“Basic food items, medical services, pharmaceuticals, education and other essentials do not attract VAT,” he said.
He also highlighted a rent relief introduced under the new tax framework to ease the burden on tenants.
“If you pay rent, you are entitled to a relief of 20 per cent of the rent paid, subject to a maximum of ₦500,000,” he said, explaining that while 20 per cent of a ₦3 million annual rent amounts to ₦600,000, the relief is capped at ₦500,000.
On tax compliance, Enamudu said Nigeria operates a self-assessment system, requiring individuals to voluntarily declare their income.
“Employers remit PAYE for salaried workers, but individuals with additional income streams—such as rent or business income—must aggregate and declare all earnings themselves,” he said.
He added that state governments are expected to apply presumptive taxation models for informal sector operators, including market traders, based on simplified and cost-effective structures.
Addressing concerns about the impact of the reforms on low-income earners, Enamudu described the new tax law as pro-poor.
“The tax act is heavily tilted in favour of low-income earners. Government wants to tax the fruit, not the seed,” he said.
He clarified that the widely discussed ₦800,000 threshold refers to taxable income, not total earnings.
“Statutory deductions such as pension contributions, health insurance, National Housing Fund contributions, interest on owner-occupied homes, and insurance premiums are deducted first. If, after these deductions, your taxable income does not exceed ₦800,000, you will not pay tax,” he explained.
Enamudu confirmed that the new tax law took effect on January 4, 2026, noting that the country is currently in a transitional implementation phase.
“With improved efficiency, more individuals and businesses will be brought into the tax net over time, leading to increased revenue and better capacity for government to meet its obligations,” he said.
Post comments (0)