As Nigeria prepares to usher in a new era of fiscal reform, the federal government has reassured citizens that the new tax laws, set to take effect on January 1, 2026, will not involve automatic deductions from personal bank accounts.
The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made the clarifications when he featured on Channels Television’s “2025 In Retrospect: Charting a Pathway to 2026”.
Oyedele said individuals will be responsible for declaring their income and paying taxes themselves, without the need for explanations regarding transfers.
“People think that the government will debit their bank accounts from next year, and how they even came up with that, I have no idea. Nobody will debit your account for any amount you transfer. Whether it’s a billion or one thousand naira, at the end of the year, you tell the government yourself”, he said.
Oyedele further explained that the process is simple and transparent.
“You know what constitutes your income and what doesn’t. So you tell the government: ‘This is my income and here is the tax.’ If you are exempted, you simply declare: ‘This is my income, and I am exempted from tax.’ It is a very simple process that we are simplifying further.”
Highlighting one of the major benefits of the reforms, Oyedele noted that the system has been redesigned to be progressive, reducing the tax burden on small businesses, sole proprietors, and informal sector workers.
“One of the biggest benefits is that if you run a small business as a sole proprietor, an enterprise, or you are just hustling, the system will no longer be regressive, taxing the vulnerable more. We’ve made it progressive”, he added.
The new tax laws, which form part of Nigeria’s broader fiscal reform agenda, are intended to enhance transparency, fairness, and inclusivity, marking a significant shift in the country’s approach to revenue collection.
