FG Won’t Tax Personal Accounts, Says Only 5% Hold Over N500k

FG Clarifies: No Automatic Tax Deductions from Personal Bank Accounts

The National Orientation Agency (NOA) has officially debunked rumors that the federal government will automatically deduct taxes from Nigerians’ personal bank accounts. This clarification addresses widespread concerns about the new tax reform laws set to take effect in January 2026.

The agency attributes the false claims to a misinterpretation of Section 29 of the Nigerian Tax Administration Act (NTAA). It stated that these misconceptions are being spread mainly by individuals and businesses that have been evading income taxes.

What the Tax Law Actually Says

Contrary to the circulating fears, the provision only requires banks to provide the tax authority with quarterly reports on customers with significant transaction volumes. This applies to individuals with cumulative monthly transactions exceeding N25 million and corporate groups with over N100 million.

As detailed in the complete version, there are several key factors to consider.

The NOA emphasized that this reporting requirement is for information purposes only. It does not authorize any automatic deduction of taxes from personal bank accounts. The government aims to identify eligible taxpayers who are evading their responsibilities, not to tax the masses arbitrarily.

Vast Majority of Nigerians Unaffected

Providing crucial context, the NOA revealed that only about 5% of bank customers maintain balances over N500,000. This statistic confirms that the new provision will not impact more than 90% of Nigerians, including the poor and vulnerable.

The agency stressed that the reforms are designed to protect low-income earners and support small businesses, not to burden them. The new tax framework explicitly exempts individuals earning N800,000 or less annually from personal income tax. Small businesses with an annual turnover of N100 million or less will pay zero percent profit tax.

Pro-Poor Tax Reforms

The NOA described the new tax acts as people-friendly and business-friendly. The laws aim to stimulate productivity by reducing the tax burden on businesses. Experts agree that the provisions are pro-poor and will relieve many Nigerians of tax burdens.

The primary goal is to enhance tax compliance among high-income earners and bring non-compliant taxpayers into the system. The federal government assures that these personal bank accounts protections remain intact while building a fairer tax system for the nation.