Nigeria Set To Enforce Automatic Tax Deductions On Unexplained Income Under New Fiscal System 2026

 

Fresh indications from the Presidential Committee on Fiscal Policy and Tax Reforms reveal that Nigeria is preparing to introduce automatic tax deductions from bank accounts belonging to citizens who receive income that cannot be reasonably justified. Taiwo Oyedele, who leads the committee, disclosed that the initiative is scheduled to begin in 2026 as part of a wider effort to modernise taxation, strengthen compliance and reduce dependence on voluntary declarations.

Speaking during an appearance on Seun Okinbaloye’s Mic On Podcast, Oyedele explained that the government aims to build a technology driven structure capable of analysing financial activity, validating self declared income and identifying tax obligations. He noted that many individuals earn above taxable thresholds yet either avoid paying or underpay what is due, a pattern he described as unsustainable for a country seeking stronger fiscal stability.

According to him, citizens will still be required to declare their earnings, but digital systems will independently verify the accuracy of such declarations. When the system detects discrepancies, authorities will notify the account holder and provide a window to clarify or correct their records. Failure to present a satisfactory explanation could trigger a direct debit from the person’s bank account, covering the outstanding tax liability.

Oyedele stressed that this approach reflects global best practices where efficient collection replaces physical enforcement. He observed that the existing methods are outdated and prone to evasion, adding that Nigeria must embrace tools that ensure transparency, fairness and professionalism. He maintained that the aim is not to intimidate citizens but to create a tax culture where civic obligations are clear, consistent and predictable.

Another key part of his clarification addressed religious institutions and the individuals they employ. While churches and mosques remain exempt from taxation as organisations unless they operate revenue generating ventures, workers on their payrolls are not excluded from personal income tax requirements. Oyedele pointed out that pastors, imams, choir members or any other paid staff are employees like those in any other sector, therefore their salaries fall under existing tax laws.

He noted that exemptions apply only when an individual earns below the legally established taxable threshold, regardless of religious affiliation or job description. He explained that fairness in taxation demands neutrality across gender, ethnicity, belief or occupation, arguing that no segment of society should receive preferential treatment when it comes to fulfilling civic responsibilities.

Oyedele emphasised that the reform seeks to balance the burden on citizens, guaranteeing that those with lower incomes contribute less while higher earners face proportionate obligations. The overarching goal, he said, is to build a system where compliance is simple, evasion is difficult and national development is supported by a predictable flow of domestic revenue.

The automatic debit measure, once activated in 2026, is expected to mark a significant shift in Nigeria’s revenue administration landscape, signalling a decisive move toward technology backed efficiency and a more accountable taxpaying environment.