The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has clarified misconceptions surrounding Nigeria’s new tax reforms, stating that the laws do not tax bank account balances and are structured to protect low-income earners and informal sector operators.
Speaking in an interview with ARISE News, Enamudu said misinformation about the reforms, particularly regarding electronic transfers and income thresholds, had caused unnecessary concern.
“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 only certain electronic transfers attract a N50 stamp duty, which applies to transfers above N10,000, while salary payments and transfers within the same bank are exempt. Previously, both sender and receiver paid the duty; the reform now requires only the sender to bear the cost. Transfers across different banks still attract a charge.
Enamudu also noted that essential goods and services remain VAT-exempt, including basic food items, medical services, pharmaceuticals, and education. In addition, a rent relief provision allows tenants to claim 20 per cent of rent paid, up to a maximum of N500,000 annually.
On compliance, Enamudu said Nigeria operates a self-assessment system where taxpayers declare their income. While employers remit PAYE for employees, individuals earning from businesses, rent, or other sources must file returns themselves. Informal sector operators, such as market women, will be managed under presumptive taxation by state governments.
“The tax act, as passed is heavily pro-poor. It gives a lot of protection for low-income earners. The government wants to tax the fruit and not the seed,” he added.
Enamudu confirmed that the law came into effect on January 4, 2026, and that a transitional period is ongoing to ensure smooth implementation.
The clarification follows remarks from President Bola Ahmed Tinubu that the reforms, including those enacted on June 26, 2025, aim to build a fair, competitive, and robust fiscal system while protecting citizens’ welfare, rather than raising taxes.
