The National Orientation Agency (NOA) has moved to dispel widespread misconceptions that the federal government will automatically deduct taxes from Nigerians’ bank accounts when the new tax reform laws take effect in January 2026.
In its latest weekly bulletin, NOA stated clearly that claims about automatic deductions under the Nigerian Tax Act, 2025 and the Nigerian Tax Administration Act are unfounded and mainly propagated by individuals and businesses seeking to evade tax obligations.
“Taxes will not be automatically deducted from the bank accounts of Nigerians,” the agency stressed.
The confusion, NOA explained, stems from a misinterpretation of Section 29 of the Nigerian Tax Administration Act (NTAA). This section requires banks and other financial institutions to provide quarterly reports to tax authorities on customers whose monthly transactions surpass N25 million for individuals and N100 million for corporate entities.
While this reporting aims to identify potential tax evaders, it does not authorize automatic withdrawal of funds from bank accounts.
Highlighting the limited scope of this provision, NOA noted that only about 5% of bank customers hold balances exceeding half a million naira, meaning over 90% of Nigerians including vulnerable and low-income groups will remain unaffected by this rule.
Tax Reform Laws Designed to Support Nigerians, Not Overburden Them
The agency also emphasized that the new tax laws aim to ease financial pressure on low-income earners and small businesses rather than increase tax burdens.
Under the revised framework, individuals earning N800,000 or less annually will be exempt from personal income tax. Similarly, small businesses with an annual turnover of N100 million or below will pay zero percent profit tax.
“The reforms introduced by the new tax Acts are people-friendly, pro-poor, and business-friendly, intended to stimulate economic productivity by reducing or eliminating profit taxes for small businesses,” NOA said.
Far from being a revenue grab, the laws are intended to improve tax compliance, especially among high-income earners, and crack down on tax evasion, thereby broadening the tax base and bringing more eligible taxpayers into the formal system.
As the January 2026 implementation date approaches, NOA urges Nigerians to disregard misleading narratives and welcomes public engagement to understand the benefits of the new tax reforms.
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