Federal Government denies plans to monitor bank accounts for tax purposesSmall businesses earning below ₦12 million exempt from income tax under new reformsExperts advise clear transaction descriptions to avoid tax disputes and ensure complianceThe Federal Government has dismissed claims that it plans to monitor personal bank accounts through transaction narrations or transfer descriptions for taxation purposes.
The clarification was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during a recent television interview.
The Chairman of Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, clarifies taxes on bank accounts.
Credit: Taiwo Oyedele/X
Source: TwitterAccording to him, there is no policy directing authorities to scrutinise bank transfer narrations to determine tax liabilities.
Oyedele stressed that Nigerians should not panic over rumours suggesting that routine banking descriptions will be used as a tax surveillance tool.
How the new tax system will workOyedele explained that Nigeria’s tax system is built around voluntary and self-declared income reporting. Taxable individuals are expected to file an annual return stating their income and, where applicable, the taxes due.
“At the end of the year, you tell the government yourself, this is my income and here is the tax, and if you’re exempted, you don’t need to pay any tax,” he said.
He added that the government has taken steps to simplify tax compliance, especially for low-income earners and small businesses.
Small businesses below N12m are exemptFor small business owners, Oyedele disclosed that enterprises with an annual turnover of ₦12 million or less are considered to have no tax-paying capacity.
As a result, they are exempt from income tax under the current reform framework.
He clarified that the government is not taxing turnover for small businesses and has identified categories of informal businesses that typically struggle to make meaningful profits.
These include vulcanisers, petty traders, and similar micro enterprises. According to Oyedele, such operators will be issued tax exemption stickers to prevent harassment by tax officials.
Confusion triggered by reports on the 2026 tax reformThe clarification follows earlier reports suggesting that Nigerians may need to pay closer attention to bank transfer narrations as the government prepares to roll out a new tax regime in January 2026.
Those reports indicated that digital banking data could be leveraged to improve tax compliance, sparking concerns that transaction descriptions might be closely examined by tax authorities.
Some tax experts warned that unclear or misleading narrations could attract additional scrutiny, potentially leading to audits or penalties.
What tax experts say about transaction descriptionsTax consultants have since clarified that taxation is focused on taxable income, particularly money received in exchange for goods or services.
They note that problems may arise during tax filing if transaction records are poorly described, as this could make it difficult to distinguish taxable income from non-taxable transfers such as gifts, refunds, or personal savings.
Clear and accurate narrations help ensure that individuals are only taxed when legally required and avoid unnecessary disputes with tax authorities.
Simple, safe transaction narrations Nigerians can useTo reduce confusion and stay compliant, experts recommend using straightforward and honest transaction descriptions, including:
Family support or gifts: “Gift / Family support”Repayment from friends: “Refund / Reimbursement”Transferring your own money: “Personal transfer / Savings” Money lent to you: “Loan received”Personal investment into a business: “Capital contribution”POS withdrawals: “POS transaction”Business sales: Clearly describe the item sold, for example, “Payment for two cartons of Indomie”President Bola Tinubu’s government goes bullish on tax reforms in Nigeria.
Credit: State House.
Source: FacebookClear documentation, experts say, remains the safest way to navigate Nigeria’s evolving tax landscape.
FG sends message to banks on TIN on bank accounts Legit.ng earlier reported that the Federal Government has sent a clear signal to Nigeria’s banking sector as part of sweeping tax reforms scheduled to take effect from January 1, 2026.
Under the new framework, banks will be required to request a Tax Identification Number from all taxable Nigerians operating bank accounts, a move that could affect millions of account holders nationwide.
The directive was confirmed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who disclosed the details in an interview shared on his official X account.
Source: Legit.ng
