The federal government has announced plans to begin automatic tax deductions from the bank accounts of Nigerians with unexplained income starting 2026.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this on the Mic On Podcast hosted by Seun Okinbaloye, saying the move is part of a broader effort to modernise Nigeria’s tax system and ensure compliance.
Oyedele explained that the government would use advanced fiscal monitoring tools to identify individuals whose incomes fall within taxable brackets but who are underreporting or not paying taxes.
“Instead of relying solely on citizens to voluntarily declare their income, we will use the system to find out. Your primary role is to declare your income, and the government will validate it through a fiscal system assessment,” Oyedele said.
He added that, under the new system, taxpayers who cannot adequately explain their income will have the corresponding taxes deducted directly from their bank accounts. “Once you’ve been given due process and fail to justify your income, the government can collect the taxes owed professionally and transparently. There’s no need for coercion,” he said.
The tax reforms will also extend to individuals employed by religious organisations, including churches and mosques. Oyedele clarified, however, that the organisations themselves remain non-taxable unless they engage in commercial activities.
“Anyone working for a religious institution—be it pastors, imams, or choir members—is liable to pay tax on their income if it exceeds the taxable threshold. The law is neutral; it does not discriminate based on gender, religion, or ethnicity,” Oyedele said.
He further emphasised that the system is designed to be progressive: “If you’re a low-income earner, your tax will be lower, and if you’re a high-income earner, your tax will go up.”
The announcement signals a major shift in Nigeria’s taxation framework, moving towards a system that relies on digital verification rather than voluntary compliance, in line with global best practices.
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