Bank balances tax Nigeria claims dismissed as CITN says only electronic transfers attract stamp duty under new tax reforms

The Chairman of the Chartered Institute of Taxation of Nigeria, Abuja District, Mr Ben Enamudu, has dismissed claims that Nigerians will be taxed on money held in their bank accounts under the new tax regime.

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Speaking in an interview with ARISE News on Tuesday in Abuja, Enamudu said misinformation surrounding the reforms had triggered unnecessary anxiety, particularly over bank transfers and income thresholds.

Addressing the issue directly, Enamudu said Nigerian tax laws make no provision for taxing bank balances.

“The narrative out there, which is the wrong narrative, is that the money in your bank account will be taxed,” he said.

“There is no provision for that in our tax laws. Nobody taxes the money in your bank account.”

He explained that the only charge linked to electronic transfers is a stamp duty, not a tax on deposits or account balances.

According to Enamudu, a ₦50 stamp duty applies when money is transferred from one account to another.

“When you make transfers from your account to someone else, there is a ₦50 stamp duty that applies,” he said.

He clarified that transfers between multiple accounts held within the same bank are exempt from the charge.

Enamudu also said the reform changes who bears the cost of the duty.

“Before now, both the sender and the receiver bore the burden of the stamp duty,” he said.

“With the new tax reform, only the sender pays.”

He added that several transactions are exempt.

“Salary accounts and payment of salaries are exempted from stamp duty. Transfers below ₦10,000 are also exempted,” he said.

“Once it hits ₦10,000, you pay the ₦50 charge.”

Transfers between personal accounts held in different banks, he noted, still attract stamp duty.

“Once it crosses one financial institution to another, the stamp duty is triggered, even if it is your own account,” Enamudu said.

On value-added tax, he said essential goods and services remain exempt.

“You don’t pay VAT on basic food items, medicals, pharmaceuticals, education and other essentials,” he said.

Enamudu also highlighted a rent relief provision introduced under the reforms.

Tenants, he said, are entitled to a relief of 20 per cent of rent paid, subject to a maximum of ₦500,000.

Using examples, he explained that a tenant paying ₦3 million annually would receive the maximum relief of ₦500,000, while a tenant paying ₦1 million would receive ₦200,000.

On compliance, Enamudu said Nigeria operates a self-assessment system.

“The law envisages that you will come forward voluntarily and declare your income,” he said.

While employers remit pay-as-you-earn taxes for workers, he said individuals with other income streams must file returns independently.

“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 models for informal sector operators such as market traders.

Addressing concerns about the impact on low-income earners, Enamudu described the reforms as protective.

“The tax act as passed is heavily pro-poor,” he said.

He clarified that the frequently cited ₦800,000 threshold refers to taxable income, not total earnings.

“It is not that if you earn ₦800,000, you don’t pay tax,” he said.

“The law says if your taxable income is ₦800,000 and below.”

He explained that statutory deductions, including pension contributions, health insurance, housing fund payments, insurance premiums, and interest on owner-occupied properties, are applied before taxable income is calculated.

“If after all these deductions your income is still not above ₦800,000, you will not pay tax,” he said.

Enamudu confirmed that the law came into effect on January 4, 2026, and is currently in a transitional implementation phase.

He said improved efficiency would gradually expand the tax base and strengthen government revenue.

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President Bola Tinubu had earlier said the new tax laws, including those enacted in June 2025 and those commencing in January 2026, represent a structural reset aimed at fairness, harmonisation, and protection of citizens’ dignity.