FG assures Nigerians new tax reforms will not debit bank accounts

The Federal Government has reassured Nigerians that the new tax reforms scheduled to take effect from January 1, 2026, will not involve automatic deductions from personal bank accounts, nor will individuals be required to justify routine bank transfers.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, gave the assurance during an end-of-year review programme focused on Nigeria’s politics, security, economy and tax policy.

Addressing growing public concerns, Oyedele dismissed claims that government agencies would directly debit citizens’ accounts under the new tax regime, describing such fears as unfounded. He explained that the system relies on voluntary self-declaration rather than automated deductions.

According to him, individuals will simply declare their income at the end of the year and pay the appropriate tax where applicable. He stressed that transfers, regardless of their value, would not trigger automatic taxation, noting that Nigerians themselves understand what constitutes taxable income and what does not.

Oyedele added that the reforms are designed to simplify tax reporting while protecting low-income earners and small business operators. He said the new framework corrects long-standing inequities by ensuring that vulnerable groups are not disproportionately taxed, describing the structure as progressive rather than regressive.

Meanwhile, President Bola Tinubu has reaffirmed that the implementation of the new tax laws will proceed as scheduled, despite criticism from opposition parties, labour unions and other interest groups. The president said the reforms are not intended to increase the tax burden on citizens but to restructure Nigeria’s fiscal system, promote harmonisation and strengthen public trust.

Tinubu described the reforms as a rare opportunity to establish a fair, competitive and sustainable tax framework capable of supporting long-term economic growth. He urged Nigerians to support the implementation process as the remaining provisions take effect in 2026.

The tax reforms, signed into law in June 2025, include exemptions for individuals earning ₦800,000 or less annually, while higher earners will be taxed at progressive rates capped at 25 per cent. Small businesses with annual turnover below ₦100 million are exempt from company income tax, value-added tax and the new development levy, while corporate tax for larger firms has been reduced from 30 to 25 per cent.

The government has also clarified that pensions, minimum wage earnings, gifts, remittances and income earned by Nigerians in the diaspora are exempt, insisting that the reforms are aimed at easing tax burdens, supporting small businesses and improving transparency in revenue collection.