The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has clarified widespread public misconceptions around Nigeria’s new tax regime, insisting that money held in bank accounts is not taxed and that recent reforms are deliberately structured to protect low-income earners.
Speaking in an interview with ARISE News on Tuesday, Enamudu said confusion around the reforms, particularly bank transfers and income thresholds, has fuelled unnecessary anxiety among Nigerians.
“The narrative out there, which is the wrong narrative, is that the monies in your bank account will be taxed. There is no provision for that in our tax laws. Nobody taxes the monies in your bank account,” he said.
Enamudu explained that what applies to electronic transfers is a ₦50 stamp duty, 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 added that the new reform has removed the burden previously shared by senders and receivers.
“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.”
According to him, several categories of transactions are fully exempt.
“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.”
On transfers between personal accounts held in different banks, Enamudu said the law currently requires payment of stamp duty.
“Once it crosses one financial institution to another, the stamp duty is triggered, even if it is your own account.”
Addressing concerns about the impact of the reforms on ordinary Nigerians, Enamudu described the new tax law as “heavily pro-poor.”
“The tax act as passed is heavily pro-poor. That is actually the reality of the act.”
He clarified that the widely referenced ₦800,000 threshold applies to taxable income, not gross earnings.
“The narrative out there also needs correction. 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 that multiple statutory reliefs are deducted 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 this structure offers significant protection for low-income earners and informal workers.
“It gives a lot of protection for low-income earners. Government wants to tax the fruit and not the seed.”
He added that basic necessities remain VAT-exempt.
“You don’t pay VAT on basic food items, medicals, pharmaceuticals, education and other essentials.”
The tax expert also highlighted a new rent relief introduced under the reform.
“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 the cap using an example.
“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 clearance certificates, Enamudu said Nigeria operates a self-assessment regime, requiring individuals to take responsibility for compliance.
“The law envisages that you will come forward voluntarily and declare your income.”
While employers file PAYE returns for salary earners, he stressed that individuals with multiple income sources must still file independently.
“Your salary income is just one line. If you earn rent or run a business, all incomes must be aggregated and declared.”
For informal sector operators such as market women, Enamudu said states will adopt presumptive taxation models.
“Market women fall under the informal sector. States will determine structures and modalities, considering the principle of economy.”
On implementation, he 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 improved efficiency would ultimately expand the tax net and boost government revenue.
“When efficiency comes into the tax environment, more people and businesses are captured. Over time, revenue will grow and government will be able to meet its obligations.”
Enamudu concluded by acknowledging that while progress has been made, public enlightenment remains critical.
“Government is doing a lot, but there is still room for more.”
Boluwatife Enome
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