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The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has refuted claims that account balances are taxed under Nigeria’s new tax regime.
Speaking during an interview on ARISE News on Tuesday, he clarified that only certain electronic transfers are subject to a ₦50 stamp duty.
Enamudu explained that the ₦50 charge, often misunderstood as a tax, is, in fact, a stamp duty applied to qualifying electronic transfers.
According to him, the duty is triggered when funds are transferred between accounts, but it does not apply to multiple accounts held by the same individual within a single bank.
Enamudu noted that the new reforms have also altered responsibility for the duty. Previously, both the sender and the recipient shared the cost, but under the current framework, only the sender bears the charge.
He added that several categories of transactions are exempt. Salary accounts and salary payments are not subject to stamp duty, and transfers below ₦10,000 are also excluded.
On value-added tax, Enamudu said essential goods and services remain exempt, including basic food items, medical services, pharmaceuticals and education.
He also highlighted a housing-related relief introduced by the reforms, explaining that tenants are entitled to a 20 per cent rent relief, capped at ₦500,000. He illustrated that while 20 per cent of a ₦3 million annual rent would amount to ₦600,000, the allowable relief would be limited to ₦500,000, whereas a tenant paying ₦1 million annually would receive a ₦200,000 relief.
Addressing tax compliance, Enamudu said Nigeria operates a self-assessment system under which individuals voluntarily declare their income for tax purposes. While employers remit Pay-As-You-Earn (PAYE) on behalf of workers, individuals with additional income streams, such as rent or business income, are required to aggregate all earnings and file returns themselves.
He added that states would rely on presumptive taxation for informal sector operators, including market women, with each state determining the appropriate structure based on economic considerations.
On broader concerns about the impact of the reforms, Enamudu described the new tax law as strongly pro-poor. He clarified that the frequently cited ₦800,000 threshold refers to taxable income rather than gross earnings.
According to him, statutory deductions, including pension contributions, National Health Insurance Scheme payments, National Housing Fund contributions, interest on owner-occupied properties, and insurance premiums, are applied before taxable income is calculated. If, after these deductions, taxable income does not exceed ₦800,000, the individual is not liable to pay tax.
He confirmed that the law has already taken effect, having become operational on January 4, 2026, and described the current phase as a transitional implementation period.
He added that improved efficiency in tax administration would gradually expand the tax base, increase revenue and enable the government to meet its obligations better.
