NRS Clarifies Bank Deductions, VAT Rate as Nigerians Raise Concerns Over New Tax Laws
- NRS has clarified that VAT remains at 7.5% and rejected claims of automatic bank deductions under Nigeria’s new tax laws
- Loans and ordinary transfers are not automatically business income; proper records help show what the money represents
- NRS promises clearer guidance on tax registration, record-keeping and filing, and urges taxpayers to seek official help
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigeria Revenue Service (NRS) has reassured millions of Nigerians that the country's Value Added Tax (VAT) rate remains unchanged at 7.5 per cent, dismissing fears of additional charges and automatic deductions from personal bank accounts under the new tax laws.
The Service clarified that the reforms do not grant tax authorities unrestricted access to taxpayers' bank accounts, stressing that tax collection and recovery must follow established legal procedures.
Source: Facebook
Samaila Abdullahi, NRS Tax Administrator for Kano, Jigawa and Katsina, disclosed this during a stakeholders' engagement and tax reform sensitisation programme in Kano.
NRS explains automatic bank debit rules
Abdullahi addressed growing concerns surrounding bank transactions, personal transfers, loans and business income, explaining that the new legislation does not automatically authorise deductions from individual accounts, per a report by the Voice of Nigeria.
He urged Nigerians to distinguish between the actual provisions of the law and misleading claims circulating about the reforms.
According to him, tax recovery must comply with applicable laws, while ordinary financial transactions should not automatically be classified as taxable business earnings.
NRS clarifies tax treatment of loans
The tax administrator also explained that money received through loans should not automatically be treated as sales revenue or business profit.
He cited an example of a trader receiving a ₦500,000 loan, noting that the amount should not be classified as ₦500,000 in business sales or profit when properly documented.
The clarification is particularly important for small business owners who regularly receive loans, family support and other transfers through their bank accounts.
New VAT laws address business concerns
The NRS acknowledged concerns among traders and small businesses about their obligations under the revised tax framework.
It promised improved taxpayer education covering registration, record-keeping, transaction reconciliation, filing procedures and applicable tax reliefs.
The agency maintained that clearer information would help businesses understand their responsibilities and avoid unnecessary compliance difficulties.
Source: UGC
NRS outlines steps for tax compliance
Speaking at the engagement, Abba Sani outlined three priorities for improving voluntary tax compliance.
These include explaining the new tax provisions, guiding taxpayers through their obligations and addressing administrative challenges.
He encouraged Nigerians to report difficulties involving registration, digital tax platforms and conflicting official explanations.
Sani stressed that transparent procedures, consistent treatment and accessible taxpayer support were essential to building public confidence.
The NRS urged individuals and businesses to maintain accurate financial records, meet statutory deadlines and seek official clarification whenever uncertainty arises.
The agency maintained that effective implementation of the reforms would depend on cooperation between taxpayers and revenue authorities.
State-by-state breakdown of VAT sharing formula
Legit.ng earlier reported that Nigeria’s fiscal landscape is set for a major shift in 2026 as a new Value Added Tax sharing formula takes effect under the recently enacted National Tax Acts.
The change, approved by the Federal Executive Council and captured in the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper, significantly increases the share of VAT revenue flowing to states, reinforcing the push toward deeper fiscal federalism.
Source: Legit.ng
