Abuja CITN Chair Assures Nigerians, Tax Reforms Won’t Touch Bank Balances
Concerns that Nigeria’s new tax framework targets personal bank balances have been dismissed by the Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, who says the reforms are being widely misunderstood and are largely designed to protect low-income earners.
Speaking during a television interview on Tuesday, Enamudu clarified that there is no provision in Nigeria’s tax laws for taxing money held in bank accounts.
According to him, what applies to certain electronic transfers is a fixed stamp duty of ₦50, not a tax on deposits or savings.
He explained that the charge is triggered only when funds are transferred electronically from one account to another, particularly across different financial institutions.
Transfers below ₦10,000 are exempt, while salary payments and salary accounts are also excluded from the duty.
Customers who operate multiple accounts within the same bank are not required to pay the stamp duty when moving funds between those accounts.
Enamudu noted that one of the changes introduced by the reform is a shift in responsibility for the duty. Previously, both the sender and receiver bore the cost, but under the new framework, only the sender pays the ₦50 charge.
Beyond bank transfers, he said the tax reforms retain exemptions on essential goods and services, stressing that value-added tax does not apply to basic food items, healthcare, pharmaceuticals, education, and other necessities.
The CITN chairman also highlighted a relief measure introduced for tenants, allowing them to deduct 20 per cent of annual rent paid from their taxable income, subject to a maximum relief of ₦500,000.
He explained that while higher rents may generate a larger percentage relief on paper, the law places a clear ceiling on the amount that can be claimed.
On tax compliance, Enamudu said Nigeria operates a self-assessment system, where individuals are expected to voluntarily declare their income for tax purposes.
While employers remit Pay-As-You-Earn (PAYE) deductions for salaried workers, he said individuals with additional income streams, such as rent or business earnings, are required to file returns that aggregate all sources of income.
He added that state governments are expected to rely on presumptive taxation models to capture informal sector operators, including market traders, using simplified and cost-effective methods.
Addressing widespread debate around the ₦800,000 threshold often cited in public discussions, Enamudu clarified that the figure refers to taxable income, not gross earnings.
He explained that statutory deductions such as pension contributions, health insurance, housing fund payments, insurance premiums, and interest on owner-occupied property, are removed before taxable income is calculated. Individuals whose income falls at or below ₦800,000 after these deductions are not liable to pay income tax.
Describing the reforms as pro-poor, Enamudu said the intent is to expand the tax net without placing undue pressure on vulnerable earners, noting that the government aims to “tax the fruit and not the seed.”
He confirmed that the new tax law took effect on January 4, 2026, and is currently in a transitional implementation phase. According to him, improved efficiency in tax administration is expected to gradually expand the tax base, boost revenue, and enhance the government’s ability to meet its obligations.
The clarification comes amid ongoing public debate over Nigeria’s tax reforms. President Bola Tinubu has maintained that the new laws, including those signed in June 2025 and others that commenced in January 2026, will be implemented as scheduled.
The President has described the reforms as a structural reset aimed at building a fairer and more competitive fiscal system, rather than increasing the tax burden on citizens.
