The Federal Government has reassured Nigerians that the new tax reforms scheduled to take effect from January 1, 2026, will not involve the automatic debiting of personal bank accounts, nor will individuals be required to justify bank transfers.
The assurance was given by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, while speaking at the event “2025 in Retrospect: Charting a Pathway to 2026,” which examined issues relating to politics, security, the economy, and tax policy.
Addressing widespread misconceptions about the reforms, Oyedele dismissed claims that the government would directly access citizens’ bank accounts.
“People think the government will debit their bank accounts from next year, and honestly, I have no idea how that narrative started. Nobody will debit your account for any amount you transfer. Whether it is one thousand naira or one billion naira, at the end of the year, you declare your income yourself,” he said.
Oyedele explained that the new tax framework is designed to be simple, transparent, and fair, particularly for small businesses and low-income earners.
“You know what constitutes your income and what does not. You simply tell the government: ‘This is my income, and here is the tax.’ If you are exempt, you declare: ‘This is my income, and I am exempt from tax.’ It is a straightforward process, and we are simplifying it even further,” he added.
He noted that one of the major benefits of the reforms is the shift away from a regressive tax system.
“If you run a small business as a sole proprietor, an enterprise, or you are just hustling, the system will no longer tax the vulnerable disproportionately. We have made it progressive,” Oyedele said.
Tinubu Insists on Implementation
Earlier on Tuesday, President Bola Tinubu reaffirmed that the implementation of the new tax laws would proceed as scheduled, despite criticism from opposition figures, labour unions, and other interest groups.
In a statement, the President said the reforms are not intended to increase taxes but to support a structural reset of Nigeria’s tax system, promote harmonisation, protect citizens’ dignity, and strengthen the social contract.
“The new tax laws, including those that took effect on June 26, 2025, and the remaining Acts scheduled to commence on January 1, 2026, will continue as planned. These reforms are a once-in-a-generation opportunity to build a fair, competitive, and robust fiscal foundation for our country,” Tinubu said.
He urged Nigerians to support the reforms as they enter the implementation phase.
Tax Laws and Public Concerns
The tax reforms, signed into law in June 2025, are aimed at simplifying Nigeria’s tax system, broadening the tax base, and protecting low-income earners and small businesses.
Key provisions include a full personal income tax exemption for individuals earning ₦800,000 or less annually, while higher earners are subject to progressive tax rates capped at 25 per cent. Small businesses with an annual turnover below ₦100 million are exempt from company income tax, value-added tax (VAT), and the new development levy. Corporate tax for larger firms has been reduced from 30 per cent to 25 per cent.
VAT remains at 7.5 per cent, with exemptions for essential goods and services, while revenue collection will be centralised under the Nigeria Revenue Service.
Despite ongoing controversy and legal challenges, the government has clarified that there will be no automatic debits or introduction of new taxes on ordinary citizens. Exemptions also cover minimum wage earners, pensioners, gifts, remittances, and diaspora Nigerians.
According to the Federal Government, the reforms are designed to ease tax burdens, support small businesses, enhance transparency, and stimulate economic growth.
