No Tax on Bank Balances in Nigeria — Only Certain Transfers Attract ₦50 Stamp Duty 

The Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Abuja District, Ben Enamudu, has clarified widespread misconceptions about Nigeria’s new tax reforms. He emphasized that money in bank accounts is not taxed, and only specific electronic transfers are subject to a ₦50 stamp duty. 

Only Electronic Transfers Are Charged 

Enamudu explained in an interview with ARISE News that misinformation about the reforms, particularly regarding bank balances and income thresholds, has caused unnecessary concern among Nigerians. 

“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 

He added that the ₦50 charge applies only to electronic transfers, not to deposits or account balances. 

Transfers within the same bank account are exempt from the stamp duty. 

Transfers between different banks, even if it’s your own account, attract the ₦50 charge. 

Previously, both sender and receiver paid the duty, but under the new law, only the sender pays. 

Exemptions 

Certain transactions are exempt from the stamp duty: 

Salary accounts and salary payments 

Transfers below ₦10,000 

VAT and Essential Goods 

Enamudu confirmed that essential goods and services remain exempt from Value Added Tax (VAT), including: 

Basic food items 

Medicals and pharmaceuticals 

Education 

Other essentials 

Rent Relief Introduced 

The new law also introduces a rent relief for tenants, allowing a deduction of 20% of rent paid, up to a maximum of ₦500,000. 

Example: If annual rent is ₦3 million, 20% is ₦600,000, but relief is capped at ₦500,000. 

If annual rent is ₦1 million, relief is ₦200,000. 

Self-Assessment for Tax Compliance 

Nigeria operates a self-assessment system for tax compliance: 

Employers remit PAYE for employees. 

Individuals with additional income (rent, business, etc.) must declare all earnings. 

Market women and informal operators are subject to state-determined presumptive taxation, designed to be simple and fair. 

Pro-Poor Tax Reforms 

Enamudu highlighted that the new tax law protects low-income earners: 

The often-mentioned ₦800,000 threshold refers to taxable income, not total income. 

Statutory deductions such as contributions to PENCOM, NHIS, National Housing Fund, owner-occupied property interest, and insurance premiums are subtracted before calculating taxable income. 

If taxable income remains ₦800,000 or below, no tax is owed. 

“Government wants to tax the fruit and not the seed,” Enamudu said, emphasizing protection for vulnerable earners. 

Implementation and Future Outlook 

The new tax laws became effective on January 4, 2026, and are already in the transitional implementation stage. Enamudu noted that improved efficiency will gradually expand the tax base, increase revenue while ensuring fairness. 

President Bola Tinubu reiterated that the reforms are not intended to raise taxes but to provide a structural reset, harmonize tax processes, and protect citizens’ dignity.  

Nigeria’s new tax reforms focus on fairness, protecting low-income earners, and simplifying the system. Bank balances are safe from taxation, and only certain electronic transfers attract a small stamp duty. Citizens are encouraged to understand the law correctly and take advantage of exemptions and reliefs.