The chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has dismissed claims that Nigerians’ bank balances will be taxed under the new tax regime, clarifying that only certain electronic transfers attract a ₦50 stamp duty and that the reforms were designed to protect low-income earners.
Speaking in an interview with ARISE News on Tuesday, Enamudu stated that widespread misinformation about the reforms, particularly regarding bank transfers and income thresholds, has created unnecessary anxiety among the public.
“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 charge applicable to electronic transfers is a stamp duty, 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.
According to him, the new 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,” he said.
Enamudu 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 said.
He further clarified that transfers between personal accounts held in different banks 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 highlighted a rent relief introduced under the reforms.
“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.
Using examples, he explained that while 20 per cent of an annual rent of ₦3 million amounts to ₦600,000, the relief is capped at ₦500,000, and for a rent of ₦1 million, the relief stands at ₦200,000.
Regarding compliance, Enamudu stated that 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) on behalf of workers, he noted that individuals with other income streams must 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 said.
He added that states would adopt presumptive taxation for informal sector operators such as market women, with modalities determined by each state in line with the principle of economy.
Addressing broader concerns, Enamudu described the new tax law as protective of vulnerable Nigerians.
“The tax act, as passed, is heavily pro-poor. That is actually the reality of the act,” he said.
He clarified that the widely cited ₦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 said.
According to him, statutory deductions—including contributions to PENCOM, NHIS, the National Housing Fund, interest on owner-occupied properties, and insurance premiums—are applied before taxable income is determined.
“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 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.
He added that improved efficiency would 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.”
