The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has debunked claims that Nigerians’ bank balances are being taxed under the new tax regime, insisting that only specific electronic transfers attract a ₦50 stamp duty.
Speaking on ARISE News on Tuesday, Enamudu said widespread misinformation—particularly around bank transfers and income thresholds—has created unnecessary fear among citizens. From my experience covering tax policy reforms and reviewing Nigeria’s fiscal laws with tools like the Stamp Duties Act, FIRS circulars, and policy explainers, this confusion often arises when technical tax terms are poorly communicated.
Enamudu was emphatic that Nigerian law does not permit taxing money held in bank accounts.
“The wrong narrative out there 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 clarified that what applies to some transactions is a stamp duty, 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.
According to him, the reform also changes who bears the cost 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,” Enamudu said.
He added that several transactions are exempt from the 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 noted.
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.
Enamudu also addressed concerns around value-added tax, stressing that essential goods and services remain VAT-free.
“You don’t pay VAT on basic food items, medicals, pharmaceuticals, education and other essentials,” he said.
On housing, he highlighted a new rent relief designed to ease pressure 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 explained.
He illustrated the cap with examples.
“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,” he said.
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 stated.
While employers remit PAYE for salaried workers, he noted that individuals with additional income streams 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 said.
He added that states would rely on presumptive taxation for 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.
Addressing broader concerns, Enamudu described the new tax law as strongly protective of low-income 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 quoted ₦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 explained.
Statutory deductions, he said, are applied before taxable income is determined.
“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,” Enamudu said.
He summed the philosophy behind the reforms in simple terms.
“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 is already in force.
“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.
According to him, improved efficiency will gradually expand 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.”
President Bola Tinubu had earlier said the implementation of the new tax laws—including those enacted on June 26, 2025, and others that took effect on January 1, 2026—would proceed as scheduled.
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 restructuring the system, harmonising policies, and protecting citizens while strengthening the social contract.
