The Federal Government of Nigeria has reassured citizens that the new tax laws, taking effect on January 1, 2026, will not involve automatic deductions from personal bank accounts.
Self-Declaration, Not Surveillance
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, clarified during an interview on Channels Television’s year-end programme, 2025 In Retrospect: Charting a Pathway to 2026, that the new system is based entirely on self-declaration of income. “People think the government will debit their bank accounts from next year, and how they even came up with that, I have no idea,” Oyedele said. “Nobody will debit your account for any amount you transfer. Whether it’s a billion or one thousand naira, at the end of the year, you declare it yourself.”
Under the framework, taxpayers will declare their taxable income at the end of the tax year. Oyedele explained, “You know what constitutes your income and what doesn’t. So you tell the government: ‘This is my income, and here is the tax.’”
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Those who qualify for exemptions can simply declare their status: “If you are exempted, you simply declare: ‘This is my income, and I am exempted from tax.’ It’s a very simple process that we are simplifying further,” he added.
Fairness at the Core
The reforms are designed to be simple, transparent, and progressive, particularly protecting small business owners and Nigerians with modest incomes. Oyedele noted that the new system will replace a regressive tax structure that previously placed undue burden on vulnerable citizens. “One of the biggest benefits is that if you run a small business, are a sole proprietor, or just hustling, the system will no longer be regressive. We’ve made it progressive,” he emphasized.
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Earlier, President Bola Tinubu reaffirmed the government’s commitment to implementing the new tax laws, including those enacted on June 26, 2025, as well as the ones coming into effect in 2026. He described the reforms as “a once-in-a-generation opportunity to build a fair, competitive, and robust fiscal foundation for Nigeria.”
Tinubu clarified that the reforms are not about raising taxes, but about promoting structural changes, harmonising systems, protecting citizens’ dignity, and strengthening the social contract. He called on all stakeholders to support the rollout, noting that the process is “firmly in the delivery stage” and that no major issue justifies delaying the reforms.
The Takeaway
With the new system, Nigerians can expect a simpler, fairer, and more transparent approach to taxation, one that respects personal autonomy while ensuring everyone contributes their fair share to national development.
