The Truth About Nigeria’s Tax Reform on Investment Income and Personal Savings
Recent claims that Nigeria’s Federal Inland Revenue Service (FIRS) is introducing new taxes on personal savings have sparked confusion. In reality, the withholding tax on interest income from Treasury bills, bonds, and promissory notes is not a new policy—it has been enforced under the Companies Income Tax Act (CITA) for years. The renewed enforcement simply reminds financial institutions to deduct tax at the source on investment earnings. Importantly, the tax does not apply to the principal saved, but to the interest earned. There is no increase or expansion of taxes since the current administration took office; the public notice only reinforces compliance with existing law. While savings accounts themselves are not taxed, interest generated from savings constitutes taxable income and is taxed accordingly. A temporary exemption on these earnings expired last year, and renewed enforcement aligns with global practices to […]