Is the Government Really Coming for Your Tax in Nigeria?

There has been a lot of noise on social media in the last few days, with many Nigerians claiming that the government is planning to introduce a new tax on personal savings. 

The conversation spread so fast that many people started to panic, wondering whether money kept in their bank accounts would soon be taxed. But according to Abuja-based financial analyst, Omowunmi Samuel, these fears are misplaced.

In her explanation, Samuel made it clear that the government is not coming for anyone’s savings. She said Nigeria has not introduced any new tax on personal deposits. What is happening, she explained, is simply the enforcement of an existing rule that has been in place for years. 

The Federal Inland Revenue Service (FIRS) only reminded financial institutions to comply with that rule, nothing more.

Her clarification comes as viral social media posts claimed that the government wanted to start taxing Treasury bills, corporate bonds, and other short-term instruments. Samuel said the posts were misleading and created unnecessary confusion about how investment income is taxed in Nigeria.

She also pointed out something many Nigerians often miss: The tax is not on your savings. The tax is on the interest your savings produce.

This means the money you set aside in your bank account is not taxable. What can be taxed is the interest it earns, because that interest is considered income under Nigerian tax laws. 

This rule is backed by the Companies Income Tax Act, which allows the FIRS to deduct withholding tax directly from interest returned on certain financial instruments.

Samuel added that the policy is not new. It has existed for several years, and banks have always been expected to deduct withholding tax on interest earned. 

The only recent change is that the temporary exemption on interest from some short-term investments expired last year. So banks are now expected to go back to full compliance. This has nothing to do with a fresh tax from the government.

She also explained that the renewed enforcement fits into Nigeria’s broader 2025 tax reform agenda. The government is trying to strengthen its revenue system at a time when crude oil earnings are uncertain. But this does not mean introducing new taxes on citizens’ savings. Instead, the focus is on ensuring the tax laws already in place are followed properly, just like other countries that automatically deduct tax from investment income.

Samuel warned that false information spreads quickly and can create fear, especially when it relates to money. She encouraged Nigerians to rely on verified information and official explanations rather than online speculation.

Meanwhile, Nigeria’s newly enacted Tax Act has introduced changes to how taxable income is calculated. One major shift is the removal of consolidated and personal relief allowances. 

They have now been replaced with a rent-based deduction capped at ₦500,000. The Act also outlines that taxable income includes profits from business, employment, investments, and capital gains, after approved deductions are applied.

Despite these broader reforms, one point remains clear: Your savings are not under attack. There is no new tax on personal deposits. What exists is the long-standing tax on interest earned, which the FIRS is simply reinforcing.