Chairman of the Presidential Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has assured Nigerians that nobody has a right to deduct taxes from their bank accounts, urging them to refrain from panic withdrawal from banks.
Speaking during a media workshop on the new tax law on Friday, Mr Oyedele said he was worried that social media accounts were ignorantly and deliberately misinforming Nigerians on tax deductions from their bank accounts, noting that it would never happen.
“Let me say this clearly, nobody – not FIRS, not CBN, not any government agency – has the power to debit your bank account. Whether you have N50,000 or N50 million, nobody is taking any money from your account. It is simply not true,” he said.
In June, President Bola Tinubu appended his signature on four tax bills: the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill 2024, the Nigeria Revenue Service (Establishment) Bill 2024, and the Joint Revenue Board of Nigeria (Establishment) Bill 2024.
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Spearheaded by Mr Oyedele, a lawyer and ex-tax expert at Pricewaterhousecoopers (Pwc), the tax reforms have been misunderstoood by many who believe that their incomes or earnings will be grossly reduced from January 2026.
The tax czar explained that there was only one way in which people’s money could be removed from their accounts: court-ordered garnishee, which means allowing a third party to deduct somene else’s money to settle a debt.
“Even in extreme cases where someone owes hundreds of millions and refuses to pay, the government cannot just wake up and remove money. They must assess you, notify you, allow objections, conclude the process, go to court, and get a judge’s order. Without that, nobody can touch your account,’ Mr Oyedele noted.
He said in three decades of tax administration in Nigeria, he had never seen a single instance where money was removed from an account “without due judicial process.”
Even under former Federal Inland Revenue Service (FIRS) Chairman, Mr Babatunde Fowler, efforts to impose post-no-debit orders on accounts suspected of tax evasion failed.
“That process didn’t succeed, and it created unnecessary panic. Nobody is repeating that mistake.”
Benefits of tax laws to low-income earners
In spite of this, low-income earners are set to benefit from the new tax laws, Economy Post earlier reported.
The law, which will take effect in January 2026, will see salary earners who receive N1.3 milliion annually or below exempted from paying income tax. In other words, if you earn N108,000 or below, your income will not be taxed. This move, analysts say, can help to encourage saving and investment in Africa’s most populous nation, My Oyedele earlier disclosed.
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Hence more than one-thirds of workers in both the private and public sectors will be exempted completely from Pay As You Earn (PAYE), which “requires employers to deduct income tax—and in some cases the employee portion of social insurance benefit taxes—from each paycheck delivered to employees as a form of advance payment on taxes due,” according to Investopedia
A large of number of Nigeria’s low-income earners are in micro, small and medium enterprises (MSMEs), which number about 39 million in the nation.
The tax reforms prescribe that if you run a small business with a N50 million turnover or your fixed assets do not exceed N250 million, you will be exempted from paying the company income tax. You will also enjoy zero withholding tax on your business revenue.
“They will not have to pay personal income tax. Small businesses, over 90 percent of small and micro, nano businesses, will no longer have to worry about paying corporate income tax or charging VAT or even deducting withholding tax or paying PAYE for their employees,” said Mr Oyedele added.
