The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Mr Ben Enamudu, has dispelled widespread claims that bank balances are subject to taxation under Nigeria’s new tax regime, clarifying that only certain electronic transfers attract a ₦50 stamp duty.
Speaking during an interview on ARISE News on Tuesday, Enamudu said misconceptions surrounding the reforms—particularly on bank transfers and income thresholds—have fueled unnecessary anxiety among Nigerians.
“There is a wrong narrative out there 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,” he said.
He explained that the ₦50 charge applied to electronic transfers is a stamp duty, not a tax on deposits or account balances.
“When you make transfers from your account to someone else, a ₦50 stamp duty applies. However, if you maintain multiple accounts within the same bank, you are not expected to pay the stamp duty,” Enamudu said.
According to him, the new reforms have also clarified responsibility for the charge.
“Previously, both the sender and the receiver bore the burden of the stamp duty. Under the new tax reform, only the sender pays,” he said.
Enamudu noted that several transactions are exempt from the duty, including salary payments and low-value transfers.
“Salary accounts and the payment of salaries are exempt from stamp duty. Transfers below ₦10,000 are also exempt. Once a transfer hits ₦10,000, the ₦50 charge applies,” he explained.
He added that transfers between personal accounts held in different banks still attract the duty.
“Once a transfer crosses from one financial institution to another, the stamp duty is triggered, even if it is your own account,” he said.
On consumption taxes, Enamudu reiterated that essential goods and services remain exempt from value-added tax (VAT).
“You do not pay VAT on basic food items, medicals, pharmaceuticals, education and other essential items,” he said.
He also highlighted a rent relief provision introduced under the reforms.
“If you pay rent as a tenant, you are entitled to a relief of 20 per cent of the rent paid, subject to a maximum of ₦500,000,” he said.
Explaining the cap, Enamudu said: “If your annual rent is ₦3 million, 20 per cent is ₦600,000, but the relief is capped at ₦500,000. If your rent is ₦1 million, the relief is ₦200,000.”
On compliance, he said Nigeria operates a self-assessment tax system, which requires voluntary income declaration by taxpayers.
“The law envisages that you will come forward and declare your income yourself,” he said, noting that while employers remit Pay-As-You-Earn (PAYE) for workers, individuals with other income streams must file returns independently.
“Your salary is just one line. If you earn rental income or run a business, all incomes must be aggregated and declared,” he added.
Enamudu said state governments would adopt presumptive taxation for operators in the informal sector, including market traders.
“Market women fall under the informal sector. States will determine the appropriate structures and modalities, guided by the principle of economy,” he said.
Addressing broader concerns about the impact of the reforms, Enamudu described the new tax law as deliberately pro-poor.
“The tax act, as passed, is heavily pro-poor. That is the reality of the law,” he said.
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