Ben Enamudu says reforms protect low-income earners, dismisses claims of hidden bank account taxation
The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has debunked widespread claims that Nigeria’s new tax regime imposes levies on bank account balances, insisting that such assertions are false and misleading.
Speaking during an interview on ARISE News on Tuesday, Enamudu said confusion surrounding the reforms, especially claims about bank deposits and income thresholds has fueled unnecessary anxiety among Nigerians.
According to him, Nigeria’s tax laws do not provide for the taxation of money held in bank accounts.
“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 stated.
He explained that what applies to certain electronic transactions is a ₦50 stamp duty, not a tax on savings or balances.
“When you make transfers from your account to someone else, there is a ₦50 stamp duty that applies. However, if you operate multiple accounts within the same bank, you are not expected to pay the stamp duty,” he said.
Enamudu noted that the reforms also redefine responsibility for the charge.
“Previously, both the sender and the receiver bore the stamp duty. Under the new tax law, only the sender pays,” he explained.
He added that several transactions are fully exempt, including salary payments and low-value transfers.
“Salary accounts and salary payments are exempted. Transfers below ₦10,000 are also exempt. Once a transfer reaches ₦10,000, the ₦50 stamp duty applies,” he said.
However, transfers between personal accounts in different banks still attract the charge.
“Once a transaction crosses from one financial institution to another, even if it is your own account, the stamp duty is triggered,” Enamudu clarified.
Beyond bank transactions, the CITN chairman stressed that essential goods and services remain exempt from Value Added Tax (VAT) under the reforms.
“You don’t pay VAT on basic food items, medical services, pharmaceuticals, education, and other essentials,” he said.
On housing, Enamudu highlighted a rent relief provision aimed at easing the burden on tenants.
“If you pay rent, you are entitled to a relief of 20 per cent of the rent paid, subject to a maximum of ₦500,000,” he explained.
He illustrated the provision with examples, noting that while 20 per cent of a ₦3 million annual rent equals ₦600,000, the relief is capped at ₦500,000. A tenant paying ₦1 million annually, he added, would qualify for ₦200,000 relief.
Addressing tax compliance, Enamudu said Nigeria operates a self-assessment system, requiring individuals to voluntarily declare their income.
“The law envisages that you will come forward and declare your income,” he said.
While employers remit Pay-As-You-Earn (PAYE) taxes for workers, he noted that individuals earning income from rent, business activities, or other sources must file returns themselves.
“Salary income is just one line. If you earn rent or operate a business, all income streams must be aggregated and declared,” he explained.
He also disclosed that state governments would apply presumptive taxation to informal sector operators, including market traders.
“Market women fall within the informal sector. States will determine the structures and modalities, guided by the principle of economy,” he said.
Responding to broader concerns, Enamudu described the new tax law as strongly pro-poor, correcting misconceptions about the widely cited ₦800,000 threshold.
“It is not that if you earn ₦800,000, you don’t pay tax. The law refers to taxable income of ₦800,000 and below,” he said.
He explained that statutory deductions such as pension contributions, NHIS, National Housing Fund payments, mortgage interest on owner-occupied homes, and insurance premiums are removed before taxable income is calculated.
“After these deductions, if your income is still not above ₦800,000, you will not pay tax,” he said.
According to Enamudu, the reforms are designed to protect vulnerable earners and gradually expand the tax base.
“It gives significant protection to low-income earners. Government wants to tax the fruit, not the seed,” he said.
He confirmed that the law came into force on January 4, 2026, noting that the country is currently in a transitional implementation phase.
“When efficiency improves within the tax system, more people and businesses will be captured. Over time, revenue will grow and government will be better positioned to meet its obligations,” Enamudu added.
President Bola Tinubu has previously affirmed that the implementation of the new tax laws would proceed as scheduled, describing the reforms as a structural reset aimed at building a fairer, more competitive fiscal system rather than increasing the tax burden on Nigerians.
