No New Tax Attack on Nigerian Savings, Financial Expert Clarifies
A financial analyst has stepped forward to clear the air about recent tax concerns circulating among Nigerian investors and savers. Omowunmi Samuel, an Abuja-based financial expert, has definitively stated that the Nigerian government is not introducing any new tax on personal savings, contrary to widespread social media claims.
The confusion emerged when social media posts suggested that President Bola Tinubu's administration planned to impose fresh taxes on Treasury bills, corporate bonds, and other short-term securities. Samuel described these claims as misleading and emphasized they have created unnecessary panic among investors.
Withholding Tax: An Existing Law, Not New Policy
Samuel explained that the withholding tax deducted from interest income is not a new development. This policy has been in effect for several years under the Companies Income Tax Act, which authorizes the Federal Inland Revenue Service to collect tax at source from returns generated on financial instruments.
The FIRS recently issued a reminder to financial institutions to ensure full compliance with this existing rule, not to introduce a new tax measure. Samuel stressed that this should not be mistaken for a sudden attempt to tax citizens' savings.
Critical Distinction: Savings vs. Investment Income
The analyst highlighted a crucial distinction that many Nigerians overlook. Personal savings deposits themselves remain completely tax-free, while only the interest earned on those deposits qualifies as taxable income under Nigerian law.
"The tax applies to income generated from investments, not the money people set aside," Samuel clarified. This distinction is fundamental to understanding the current enforcement actions.
Temporary Exemption Window Has Closed
Samuel revealed that a temporary exemption that previously applied to interest from short-term investments expired last year. Financial institutions are now expected to resume full withholding tax deductions on such earnings as part of broader compliance strengthening efforts.
This development aligns with global standards where many countries automatically deduct tax from investment income to improve revenue collection efficiency.
Connection to Nigeria's 2025 Tax Reform Strategy
The renewed enforcement is tied to Nigeria's comprehensive 2025 tax reform strategy aimed at bolstering non-oil revenue. With crude output remaining low and public debt continuing to rise, the government is working to enhance revenue system efficiency without imposing fresh tax burdens on citizens.
Samuel cautioned Nigerians against spreading unverified claims about new taxes, which can create unnecessary fear. She encouraged the public to rely on accurate information and official guidance from relevant authorities.
The financial expert emphasized that the FIRS remains focused on ensuring taxable investment income is properly accounted for, just as it has always been, while Nigerians' personal savings remain completely protected and untouched by these enforcement actions.
