Will Nigeria's New Tax Law Tax Your Bank Transfers?

The short answer: No. Nigeria’s new tax law taxes your income, not every credit alert that enters your account. Money from family, a loan, or a transfer between your own accounts is not income. What has changed is smaller: a flat ₦50 stamp duty when you send ₦10,000 or more, and 7.5% VAT on your bank’s fees (not on the money you send).

If you’ve been hearing “from now on, any money wey enter your account go collect tax”, you’re not alone. That rumour has been flying up and down WhatsApp since January. Some people have even started writing “gift” on every transfer, just in case.

Make we clear the matter once and for all.

What the new tax law actually taxes

Nigeria’s new tax laws, including the Nigeria Tax Act 2025, took effect on 1 January 2026. They tax income: money you earn. That includes:

• your salary or wages
• profit from your business or side hustle
• money you earn online (freelancing, content creation, digital work)
• rent, interest and dividends

What they don’t tax is money simply moving in and out of your account. As Taiwo Oyedele, chair of the Presidential Committee on Fiscal Policy and Tax Reforms, put it: “Nobody will debit your bank account.” The system works by you declaring your income yourself, not by the tax office watching every alert.

Money that is NOT income

These don’t become taxable just because they landed in your account:

• Gifts from family and friends (“Mummy sent me ₦20k for foodstuff”)
• Loans you collect, and money people pay back to you
• Transfers between your own accounts
• Money you’re holding for someone else, like contributions for an aunty’s burial or your office’s end-of-year party

Simple rule: ask yourself, “Did I earn this money?” If yes, it’s income. If no, it’s not.

The 3 charges people keep mixing up

A lot of the confusion comes from three different things that all show up around your bank account.

Charge	What it applies to	Who pays	How much
Personal income tax	Your total income for the year	You, only if you earn above ₦800,000 a year	0% up to ₦800,000, rising to 25% above ₦50 million
Stamp duty (replaced the old EMTL)	Each electronic transfer of ₦10,000 or more	The sender	Flat ₦50
VAT on bank charges	Your bank’s fees (transfer, SMS, card, POS fees), not the amount you send	The customer	7.5% of the fee

The ₦50 stamp duty, explained

From 1 January 2026, when you send ₦10,000 or more, ₦50 stamp duty comes from your account as the sender. Before, under the old Electronic Money Transfer Levy (EMTL), it was taken from the person receiving the money.

You don’t pay it on:

• transfers below ₦10,000
• salary payments
• transfers between your own accounts in the same bank

VAT on bank charges, explained

VAT is charged on the fee your bank charges you, not on your money. If your bank charges a ₦50 transfer fee, VAT is 7.5% of ₦50, which is ₦3.75. It is not 7.5% of the ₦50,000 you sent.

The Nigeria Revenue Service (NRS) has also said there’s no new VAT on banking services under the new law. What changed is that banks now collect and show it more clearly, which is why you may suddenly be seeing “VAT” on your alerts.

Who pays income tax, and how much?

Good news first: if you earn ₦800,000 a year or less (about ₦66,667 a month), you pay nothing. People earning the national minimum wage are also exempt.

Above that, tax is charged in bands. You only pay each rate on the part of your income inside that band:

Yearly income	Tax rate on that part
First ₦800,000	0%
Next ₦2.2 million (up to ₦3 million)	15%
Next ₦9 million (up to ₦12 million)	18%
Next ₦13 million (up to ₦25 million)	21%
Next ₦25 million (up to ₦50 million)	23%
Above ₦50 million	25%

A rough example: if you earn ₦100,000 a month (₦1.2 million a year), the first ₦800,000 is tax-free and the remaining ₦400,000 is taxed at 15%. That’s ₦60,000 a year, or about ₦5,000 a month, and that’s before reliefs like rent relief and pension, which can bring it down further.

This is a simple illustration, not tax advice. Your real figure depends on your reliefs and deductions.

Does writing “gift” on transfers help?

No. Writing “gift”, “food money” or “for mama” in the narration doesn’t change anything.

Tax is based on what the money really is, not what you typed in the description box. If your business makes money all year and you label every payment as a gift, the tax office can look at what’s really happening and treat it as income. Tax experts warn that misleading narrations can actually land you in more trouble, with extra assessments and penalties.

So relax. If it’s a real gift, it’s not income anyway. If it’s income, calling it a gift won’t hide it.

The real risk: not filing

Here’s what most people miss. The new system depends on you declaring your income. If you earn above the tax-free level and you don’t file, the tax office may treat the money entering your account as income and send you an assessment.

To protect yourself:

1. Keep simple records: what you earned, what was a gift, what was a loan.
2. Know your income band using the table above.
3. File your returns if you earn above ₦800,000 a year. If you’re on salary, your employer deducts PAYE for you.
4. Ask a tax professional if you run a business or earn from several places.

Frequently asked questions

Will every money that enters my account be taxed?

No. Only income is taxed. Gifts, loans and transfers between your own accounts are not income.

Can the government debit my account for tax?

Not just like that. The system is based on self-declaration and formal assessment. Your account isn’t automatically debited because money came in.

Who pays the ₦50 charge on transfers now?

The sender, on transfers of ₦10,000 and above, since 1 January 2026. Before, the receiver paid it under the old EMTL.

Is there VAT on the money I transfer?

No. VAT (7.5%) is on your bank’s fees, not the amount you send.

I earn less than ₦800,000 a year. Do I pay tax?

No. Income up to ₦800,000 a year is tax-free, and minimum wage earners are exempt.

I do side hustles online. Do I pay tax?

Money you earn from side hustles and online work is income. If your total income for the year is above ₦800,000, it’s taxable. Keep records and file.

Is money from my parents or friends taxable?

A genuine gift is not income, so it’s not taxed as income.

Should I write “gift” on transfers to be safe?

No need. The narration doesn’t decide whether money is taxable, and false narrations can cause problems later.

The bottom line

The new tax law is not coming for every credit alert. It taxes income, it starts above ₦800,000 a year, and it relies on you declaring what you earn. The two things you’ll actually notice day to day are the ₦50 stamp duty when you send ₦10,000 or more, and VAT on bank fees.

So no need to panic, and no need to start writing “gift” on every transfer. Just know the rules, keep your records, and file if your income is above the line.

This post is general information, not tax advice. It’s based on the sources listed below, as of November 2026. For your own situation, speak to a tax professional or check the Nigeria Revenue Service.