Only profits will be taxed, we won’t touch savings in bank accounts — NRS boss
By Elegbede Abiodun
The Executive Chairman of the Nigeria Revenue Service, Dr Zacch Adedeji, on Tuesday sought to calm public fears over the new tax laws, insisting that neither the old regime nor the new one empowers any authority to tax money sitting in Nigerians’ bank accounts.
“Whether old tax law or new tax law has nothing to do with your personal bank account, whether you’re a company or you are an individual.
“Don’t forget that tax is a percentage of your profits. So if you have an asset, the asset is not to be taxed. We only tax the profits. We only tax the return,” Adedeji said on Journalists’ Hangout, a programme aired on TVC.
His comments come amid widespread rumours and anxiety around the reforms that took effect on January 1, 2026, including claims that transfers, account narrations, or savings balances could trigger automatic deductions by tax authorities.
Adedeji dismissed such claims as miscommunication, adding that there is “no law that allows anybody to go into your bank account and tax you because you transfer money or you keep money.”
According to him, personal transfers, gifts, and intra-account movements do not fall under the tax net by default.
“If you transfer money from your account to my brother, that is a personal transaction between both of you. It has nothing to do with tax authority, whether at the state level or at the federal level,” he said.
He also pushed back against the idea that banks can be instructed to debit accounts for tax simply because of the existence of funds or the description attached to a transfer.
“There’s no such provision in any tax act. Whether you describe it or you don’t put any description, tax law, both the old law or even the new law that we have now has not given anybody any right to come into your personal account and tax you and instruct the bank to debit you,” he said.
Adedeji used the interview to frame the transition from the Federal Inland Revenue Service to the Nigeria Revenue Service as more than a change of name, describing it as an institutional overhaul designed to simplify compliance and modernise collection.
He said the transition provisions were embedded in the law signed in June, with commencement on January 1, 2026, based on the national tax policy principle that major changes should allow adjustment time for businesses and administrators.
Adedeji claimed early market signals supported the direction of the reform, though he did not cite figures.
He argued that beyond “rumours”, Nigeria had begun seeing positive responses reflected in market activity and broader sentiment.
He also urged Nigerians to assess the new laws “based on facts and data, not on rumours, pointing to the absence of any widespread incident since the commencement date.
“You can see now that we are on the 13th of January, all those myths… You can see that those things were nowhere to be found,” he said.
On one of the most debated provisions, he explained that the development levy was not a fresh tax but a consolidation of what he described as multiple earmarked taxes.
“Before now, we have what we call earmarked taxes. You have education tax, you have police trust fund… which makes it very difficult for businesses to plan,” he said. “But with this one item, which we call development tax, which is the summation of all these earmarked taxes… it is a consolidation of all the earmarked taxes that we are paying already today into one to simplify compliance.”
He added that the consolidation would support spending on education and other development priorities, including security, which he described as new additions to the sharing of the levy.
Adedeji also insisted that the reform was structured to reduce the burden on poorer Nigerians, arguing that key expenditure items for low-income households are exempt from transactional taxes.
“If you look at the exemption list, 90 per cent of the disposable income of poor people is on food and transport,” he said. “If you look at the tax acts, all these are exempted from transactional taxes, food, and transportation.”
He said low-salaried earners would see reduced tax deductions, suggesting evidence would show up in January salary payments.
“By the time the salary is being paid by this end of January, the salary earner in that lower cadre will confirm compared to what they’ve paid under the old law,” he said.
Adedeji rejected calls for suspending the new laws, arguing that such demands were incompatible with democratic governance.
“The suspension of law has no place in a democratic setting. When law is passed, it becomes law,” he said.
He contended that suspending the law would also create a legal vacuum since older tax laws had been repealed.
In response to criticism attributed to KPMG, Adedeji said the government’s approach was engagement, not hostility.
He said he met with the firm and that misunderstandings were expected, given the scope of change.
“It is expected that people either don’t understand all, they don’t have the context, or they misinterpret what they read because it is new,” he said, adding that the administration welcomed feedback that could improve implementation.
He also addressed concerns around tax clearance certificates and the transition between regimes.
He said existing certificates remain valid as issued and that taxpayers should not fear disruption.
On withholding tax, he described it as a prepaid tax rather than an extra layer, and suggested complaints often stem from weak compliance habits. “When the tax is being withheld… it’s a prepaid tax of the taxpayer,” he said, explaining that withholding tax credits should reduce final liabilities when taxpayers file properly.
For businesses, including service providers and firms handling withholding obligations, he warned of strict consequences for non-compliance.
Adedeji also briefly spoke about taxing digital asset activity, maintaining the same principle of taxing profits rather than capital. “On losses, you don’t pay tax. Because tax is only on profits,” he said. He added that the reforms removed what he described as minimum tax provisions that required payments even when businesses recorded losses, which he said amounted to “taxing the capital”.
He said a broader objective of the reforms was to harmonise Nigeria’s tax rules, reduce manual interventions, and rely more on technology and revenue intelligence.
