Amid growing panic on social media about new taxes targeting Nigerian savings, a financial expert has stepped forward to clear the air and provide much-needed clarity.
No New Tax on Savings Accounts
Abuja-based financial analyst Omowunmi Samuel has firmly dismissed viral claims suggesting the Federal Inland Revenue Service plans to introduce fresh taxes on Treasury bills, corporate bonds, and other short-term investments.
Samuel emphasized that the controversy stems from what she called a basic misunderstanding of how investment income taxation works in Nigeria. Speaking on Wednesday, the analyst clarified that the withholding tax on interest income has been operational for years under the Companies Income Tax Act.
This legislation empowers FIRS to deduct tax at source from interest earned on various financial instruments. Samuel stressed that this is not a new development but rather a long-standing practice that some Nigerians are only now becoming aware of.
Tax Applies Only to Interest, Not Principal
The financial expert provided crucial clarification about what exactly is being taxed. The tax does not apply to the principal amount saved, only to the income generated from those savings. This distinction is vital for Nigerians to understand.
Samuel explained that many citizens are confusing personal savings with interest earned on savings and investments. While savings themselves remain untaxed, interest income has always been subject to withholding tax as it's treated as earnings.
The recent FIRS public notice that sparked the online panic was merely a reminder to banks and financial institutions to enforce an already-existing obligation, not the introduction of any new levy.
Temporary Exemption Has Expired
According to Samuel, a temporary exemption on interest from short-term securities reportedly expired last year. This means financial institutions must now return to full compliance with the existing tax regulations.
The analyst linked the renewed enforcement to Nigeria's 2025 tax reform strategy, which aims to boost non-oil revenue at a time when the country faces falling crude output and rising public debt.
Samuel noted that this approach aligns with global standards, as many countries automatically deduct tax on investment income to improve compliance and transparency in their tax systems.
Warning Against Misinformation
Samuel issued a strong caution about the dangers of widespread misinformation regarding tax policy. She warned that false claims can fuel unnecessary public panic and create confusion among citizens.
The current administration has introduced no new taxes targeting personal savings, according to the analyst. What FIRS is doing is ensuring that taxable investment income is properly accounted for, consistent with long-standing practice.
Samuel urged Nigerians to rely on verified information from official sources and avoid social media speculation that may distort the government's revenue reform efforts. She emphasized the importance of getting facts straight before reacting to potentially misleading information circulating online.
