The Chartered Institute of Taxation of Nigeria has clarified that money kept in bank accounts is not taxed under Nigeria’s new tax regime, stressing that only certain electronic transfers attract a ₦50 stamp duty.
The Chairman of CITN, Abuja District, Mr Ben Enamudu, made this clarification while speaking on ARISE News, following widespread public concern over claims that bank balances were being taxed.
According to him, the idea that savings or deposits in bank accounts are taxed is incorrect and not supported by any existing tax law.
“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,” Enamudu said.
He explained that the ₦50 charge often mentioned is a stamp duty applied to eligible electronic transfers, not a tax on deposits 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 said.
Enamudu noted that the new tax reforms have also changed how the duty is applied, as only the sender now bears the charge.
“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 added.
He further explained that several transactions are exempt from the duty, including salary-related payments and low-value transfers.
“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.
The CITN chairman added that transfers between personal accounts held in different banks would still attract the 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, Enamudu said essential goods and services remain exempt, noting that basic food items, medical services, pharmaceuticals and education are not subject to VAT.
He also highlighted a rent relief provision under the new tax law.
“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, adding that the relief is capped regardless of how high the rent may be.
On tax compliance, Enamudu explained that Nigeria operates a self assessment system, where individuals are expected to voluntarily declare their income.
“The law envisages that you will come forward voluntarily and declare your income,” he said.
While employers remit Pay As You Earn for workers, he noted that individuals with other income sources 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 to capture informal sector operators such as market women, based on structures determined by each state.
Addressing concerns about the impact of the reforms, Enamudu described the new tax law as pro poor, noting that the widely discussed ₦800,000 threshold refers to taxable income and not total 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.
He explained that statutory deductions such as pension contributions, health insurance, housing fund payments, insurance premiums and interest on owner occupied properties are removed 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 took effect on January 4, 2026, adding that the country is currently in a transition phase.
“The act is already active. We are at the implementation stage,” he said, noting that improved efficiency would gradually expand the tax base and boost government revenue.
According to him, the overall goal of the reforms is to protect low income earners while strengthening government capacity to meet its obligations.
“Government wants to tax the fruit and not the seed,” he said.
