Banks Begin 10% Tax on Dollar Deposits as Nigeria’s New Tax Laws Take Effect
- Nigerian banks have implemented a 10% withholding tax on foreign currency deposit interest from January 1, 2026
- Access Bank informed customers about changes and other adjusted banking charges following new tax reforms
- Meanwhile, President Tinubu had endorsed tax reforms aimed at creating a fairer tax system while exempting low-income earners
Nigerian banks have begun implementing a 10 percent withholding tax on interest earned from foreign currency deposits, marking one of the first visible outcomes of the country’s newly enacted tax reforms.
The deductions took effect from January 1, 2026, and apply to interest on dollar and other foreign currency accounts held by customers.
Source: Getty Images
Major lenders, including Access Bank, Zenith Bank, United Bank for Africa (UBA), and others, have started notifying customers of the change, which is rooted in the Nigeria Tax Act, 2025.
Access Bank notifies customers
In an email sent to customers on Wednesday, December 31, 2025, Access Bank outlined the changes that would take effect from the new year.
The bank explained that interest earned on foreign currency deposits will now attract a 10 per cent withholding tax, which will be deducted at source and remitted to the federal government.
The bank assured customers that the deductions are in line with existing regulations and that all applicable taxes would be paid to the appropriate authorities as required by law.
Other tax charges were also adjusted
According to a report by TheCable, beyond the withholding tax on foreign currency interest, Access Bank also highlighted a change to the Electronic Money Transfer Levy (EMTL).
Previously charged to the recipient on transfers of ₦10,000 and above, the ₦50 levy will now be deducted from the sender’s account.
This adjustment aligns with broader efforts by regulators to standardise banking charges and improve transparency in transaction-related deductions across the financial system.
Directive from Nigeria Revenue Service
The new tax regime follows a directive issued on October 29, 2025, by the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS).
The agency instructed banks and other financial institutions to deduct withholding tax on all interest payments arising from short-term investment securities.
According to the NRS, the tax applies to interest payable to any individual or entity, including non-corporate investors, and must be deducted at the point of payment.
While that directive focused largely on investment instruments, the implementation of the Nigeria Tax Act has now extended the scope of withholding tax enforcement to interest earned on foreign currency deposits.
Tinubu flags off tax reform implementation
President Bola Tinubu confirmed on December 30 that the implementation of Nigeria’s tax reform laws would proceed as scheduled from January 1, 2026.
In a statement, the president described the reforms as a once-in-a-generation opportunity to rebuild the country’s fiscal framework.
Tinubu stressed that the new laws are aimed at creating a fairer, more competitive, and more sustainable tax system, rather than simply increasing the tax burden on citizens and businesses.
What it means for bank customers
For holders of dollar and other foreign currency accounts, the new rule means net interest earnings will be slightly lower after tax deductions.
However, the principal balances in such accounts remain unaffected.
Source: Getty Images
As more banks roll out customer notifications, the 10 per cent withholding tax is expected to become a standard feature across Nigeria’s banking sector, reinforcing the government’s push for stronger tax compliance and revenue mobilisation under the new legal framework.
FG unveils Nigerians exempted from paying income tax
Legit.ng previously reported that the federal government announced major personal income tax exemptions that would take effect from January, offering relief to millions of low-income earners as enforcement of Nigeria’s new tax reforms begins.
Under the reforms, individuals earning up to about N100,000 per month will no longer be required to pay personal income tax.
The announcement was made by Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who said the changes had been designed to reduce hardship, improve fairness, and reset the relationship between citizens and the tax system.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
