The Executive Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, has moved to allay growing public anxiety over Nigeria’s newly implemented tax laws, firmly dismissing claims that the reforms empower authorities to tax funds sitting in citizens’ bank accounts.
Speaking on Journalists’ Hangout, a TVC programme aired on Tuesday, Adedeji clarified that neither the former tax regime nor the new laws that took effect on January 1, 2026, permit the taxation of personal savings, bank balances, or routine transfers.
“Whether under the old law or the new law, tax has nothing to do with your personal bank account—whether you are an individual or a company,” Adedeji said. “Tax is charged on profits, not on assets. We tax returns, not money sitting idle.”
His remarks followed weeks of widespread speculation suggesting that the new laws could trigger automatic deductions from bank accounts based on transfers, narrations, or account balances.
Adedeji described such claims as misinformation, stressing that no tax legislation authorises banks to debit accounts simply because funds exist or descriptions are attached to transactions.
“There is no law that allows anybody to enter your account and tax you because you transferred money or saved money,” he stated, adding that personal transfers, gifts, and movements between accounts remain outside the tax net.
Addressing concerns about the transition from the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service, Adedeji explained that the change represents a deeper institutional reform aimed at simplifying compliance, modernising revenue collection, and improving efficiency. He noted that the transition provisions were signed into law in June 2025, with implementation beginning this year to allow adequate adjustment time.
On the controversial development levy, Adedeji clarified that it is not a new tax but a consolidation of existing earmarked taxes such as education tax and the police trust fund levy.
According to him, the move is designed to ease planning for businesses while ensuring sustained funding for education, security, and other development priorities.
He also insisted that the reforms are structured to protect low-income earners, pointing out that essential spending areas such as food and transportation where most poor households spend their income are exempt from transactional taxes.
“If you look at the exemption list, about 90 per cent of the disposable income of poor people is spent on food and transport, and these are fully exempt,” he said, adding that low-income workers would notice reduced tax deductions in their January salaries.
Adedeji rejected calls for the suspension of the new tax laws, arguing that such action would undermine democratic governance and create a legal vacuum, as previous tax laws had already been repealed.
He also addressed concerns raised by professional firms and stakeholders, saying the government remained open to dialogue and feedback to improve implementation.
Existing tax clearance certificates, he assured, remain valid, while withholding tax continues to function as a prepaid tax credit rather than an additional burden.
On digital assets, Adedeji reiterated that taxation would apply only to profits, not capital, noting that businesses recording losses would not be taxed under the new framework—a departure from previous minimum tax provisions.
According to him, the broader goal of the reforms is to harmonise Nigeria’s tax system, reduce manual processes, and rely more on technology and revenue intelligence, while ensuring fairness and clarity for taxpayers.
As he concluded, Adedeji urged Nigerians to judge the new tax regime based on facts rather than rumours, noting that no incidents had occurred since implementation to support the widespread fears.