The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Mr Ben Enamudu, has dismissed claims that bank balances are taxed under Nigeria’s new tax regime, clarifying that only certain electronic transfers attract a ₦50 stamp duty, while the reforms are structured to protect low-income earners.
Speaking during an interview on ARISE News on Tuesday, Enamudu said widespread misinformation surrounding the new tax reforms, particularly on bank transfers and income thresholds, had generated unnecessary anxiety among Nigerians.
According to him, there is no provision in Nigeria’s tax laws for the taxation of funds kept in bank accounts.
“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 the applicable charge on electronic transfers is a stamp duty and not a tax on deposits or account 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,” Enamudu said.
He further explained that the reforms have altered the responsibility for payment of the 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 stated.
Enamudu noted that several transactions are exempt from the stamp duty charge.
“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 said.
He added that transfers between personal accounts held in different banks would 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.
On value-added tax, Enamudu explained that 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 highlighted rent relief provisions introduced under the reforms, stating that tenants are entitled to relief on rent paid.
“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 cap, he added: “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 for tax clearance.
“The law envisages that you will come forward voluntarily and declare your income,” he said.
While employers remit Pay-As-You-Earn (PAYE) tax for employees, he said individuals with additional income sources are required to file their returns personally.
“Your salary income is just one line. If you earn rent or run a business, all incomes must be aggregated and declared,” he explained.
He added that states would adopt 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.
Addressing concerns about the impact of the reforms, Enamudu described the new tax law as pro-poor and protective of vulnerable earners.
“The tax act as passed is heavily pro-poor. That is actually the reality of the act,” he said.
He clarified that the widely referenced ₦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 said.
According to him, statutory deductions are made before determining taxable income.
“Contributions to PENCOM, NHIS, National Housing Fund, interest on owner-occupied properties, and insurance premiums for yourself and your spouse are deducted. After all these deductions, if your income is still not above ₦800,000, you will not pay tax,” he said.
He stressed that the framework offers significant relief for low-income earners and participants in the informal sector.
“It gives a lot of protection for low-income earners. Government wants to tax the fruit and not the seed,” he said.
Enamudu 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 stated.
He expressed optimism that improved efficiency would expand the tax base over time.
“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,” he said.
Meanwhile, President Bola Tinubu has reiterated that the implementation of the new tax laws, including those enacted on June 26, 2025, and others scheduled to commence on January 1, 2026, would proceed as planned.
The President described the reforms as “a once-in-a-generation opportunity to build a fair, competitive, and robust fiscal foundation,” stressing that the laws are not aimed at raising taxes but at promoting harmonisation, protecting dignity and strengthening the social contract.
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