Oluwasola AJAO & CO.- Chartered Accountants

03/01/2026

*_FG TAXES_*
*Taiwo Oyedele, Chairman Of Presidential Committee On Fiscal Policy & Tax Reforms*

The Federal Government has assured Nigerians that the new tax laws will not involve monitoring or debiting personal bank accounts based on transfer narrations.

Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, made the clarification during Channels Television’s end-of-year special on Tuesday.

There is no tax man in the world that has the capacity to go after everyone,” he said.

“Nobody will debit your bank account. At the end of the year, you tell the government yourself,” he said.

He added that the reformed tax system relies on self-declaration. “You know the amount that is your income. You know the one that is not your income.
“So you tell the government, this is my income, and here is the tax. If you’re exempted, you don’t need to pay any tax. Just say this is my income, and I’m exempted from tax,” Oyedele said.
He added that most Nigerians opposing the reforms are not in the income bracket targeted by the policy and also addressed misinformation spread by some content creators.
“There are content creators who admitted they make up to $10,000 a month. They don’t want to pay tax.

“You think they’ll go and create content that says they want to tax $10,000 a month? No. They’ll say they’re going to debit your bank account. So you can help them fight. Debit your 5,000 naira. You can help them fight the reform, you know,” he said.

He highlighted benefits for small businesses under the reform, saying, “Now, if you run a small business, this is even one of the biggest benefits of the tax reform.

“If you run a small business as a sole proprietor as an enterprise, you just host them. You don’t even have a name for the business. You just host them. Today, there are all manner of levies and taxes.”

He concluded that the reforms are designed to simplify tax reporting, protect small earners, and make the system progressive.

15/11/2025

03/12/2023

https://punchng.com/firs-waives-penalties-interests-on-outstanding-tax-liabilities/

The Federal Inland Revenue Service has granted a full waiver on accumulated penalties and interests for outstanding tax liabilities.

23/10/2021

EVOLUTION OF THE NIGERIA DIGITAL CURRENCY: THE e-NAIRA

What is digital currency?

Digital currency is any form of money or payment that exists solely in electronic form. It does not have a tangible form such as a bill, cheque, or coins and is accounted for and transferred using electronic codes in computers. As technology becomes increasingly prominent, payments are becoming more digital, resulting in less use of tangible money. New forms of technology now allow for more secure and seamless use of digital currencies. Digital currency can be transferred and exchanged with technologies like credit cards, smartphones, and online cryptocurrency exchanges.

The history of digital currency dates back to the invention of the internet. There were difficulties in getting the population to adopt the use of digital currency in the early days; however, as people become more comfortable with technology, and the technology itself becomes more safe and secure, more people are now willing to utilize digital monies. PayPal is considered one of the first successful companies to bring the idea of easy-use digital financial transactions to mass adoption. Prominent examples of digital currency include Bitcoin, Ethereum, Ripple and Litecoin, amongst others. Central bank’s digital currency (CBDC) is another form of digital currency that are gaining global adoption and acceptance. The CBDC is the virtual format of a fiat currency for a particular nation or region. It is an electronic record or digital token of the official currency and is issued and regulated by its monetary authority. Many countries such as China, the US, England, Canada and Russia have taken concrete steps towards issuing a virtual format of their official currencies.

Digital currencies have assisted in the globalization of economies around the world since trade is made more easily by sending and receiving digital currency. It eliminates the need to physically transfer money; furthermore, banking is made much more convenient by allowing people to perform their banking without the need to visit a physical branch or carry cash.

On the other hand, banks are reducing their retail employee headcount to meet the trend of digital currency. Many branches are closed since they become redundant when more people increasingly bank with digital currency. It comes at a cost, however, as the banks are not able to maintain personal relationships with customers and create any sort of loyalty. In addition, banks cannot cross-sell their other products without in-person sales opportunities.

The Central Bank of Nigeria (CBN) launched the official website of its digital currency, the e-Naira, on the 24th of September 2021. The digital currency was launched as Nigeria's alternative to the more prevalent currencies like bitcoins and cryptocurrencies. The currency is set to have an app that is currently unavailable for download. The e-Naira is set to serve as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments. The currency has an exclusive operational structure that is both remarkable and nothing like other forms of central bank money.

Benefits of adopting the e-Naira

The CBN explained that eNaira users will benefit from the website’s simplified financial transactions, according to a statement that noted that users will be able to send money to one another using a linked bank account or credit card. It will also allow customers the ability to transfer money from their bank account to their e-Naira wallet with ease. The currency creates easy access to financial services in remote areas that have suffered financial exclusion for years. Also, it enables the government to send direct welfare allowance to citizens and communities that are beneficiaries of such interventions and facilitates instant cross-border foreign exchange which boosts the economic growth of the nation. It offers bank customers the opportunity to monitor their e-Naira wallet, check balances, view transaction history; and customers will be able to make in-store payments using their e-Naira wallet by scanning QR codes. In addition, customers are allowed to scan the QR Code on the website to get started.

Challenges confronting the use of Digital Currency

One significant risk that can be attributed to the increasing use of digital currency is payment fraud which can be committed in many forms. However, in general, it includes fraudulent or unauthorized transactions completed by a cybercriminal. Some common forms of payments fraud include:

Fraudulent payments
Illegal payments
Internal manipulation
Data theft
Breach of embargos and sanctions
Because money is not transferred physically, it is impossible to know who is on the other side of a transaction. It gives rise to opportunities for cybercriminals to gain access to sensitive information or scam people through digital currency.

Although payment security has been increasing, the complexity of which cyber criminals commit fraud is becoming increasingly complex as well. Payments fraud activity is continuing to rise, and it shows no signs of declining.

Modern-day cyber criminals are becoming craftier than ever, continuously exploiting new weaknesses and devising different methods of manipulating digital currency. Scammers are very persistent in their efforts to attack payment systems. If they face challenges on a particular method, they will just pivot and shift their focus to alternative payment methods.

Conclusion

The government needs to design a well-thought-through framework for the administration of the e-Naira. Being a legal tender, the digital currency has huge potentials including the capacity to improve the value of the Naira and bring about an increase in government revenue due to the ease of concluding transactions, especially across borders.

17/05/2021

FINANCE ACT 2020 AND DIRECT TAXATION IN NIGERIA

INTRODUCTION

The primary objective of the Finance Act 2020 is to ensure that taxpayers are brought into the tax net by the government. The Act brought a lot of changes into the tax laws as it relates to direct taxes in Nigeria.

DIRECT TAXES

Direct taxes are those taxes imposed on the income of taxpayers, the incidence of which falls directly on the taxpayers. In this case, it is impossible for the tax payers to shift the burden to another person.

TYPES OF DIRECT TAXES

Taxes that fall under direct taxes are as follows:

PERSONAL INCOME TAX- This is an income tax payable for any year of assessment on the chargeable income of individuals.
Under personal income tax, earned incomes are those incomes derived by an individual from trade, business, vocation or employment as well as income derived from a previous employment by way of pensions.

Unearned incomes however, include incomes from investments made by an individual such as rents, dividends, interests, lease premium etc.

COMPANY INCOME TAX- This is a tax imposed on every company engaged in commercial business transactions in which such company renders a return of its transactions for each year of assessment to the relevant tax authorities for the purpose of assessment to tax.
These returns are to be adjusted in line with the provisions of company income tax act as amended before an assessment is raised.

CAPITAL GAINS TAX- Capital gains tax is defined as a government fee on the profit made from selling certain types of assets. These include stock investments or real estate property. A capital gain is calculated as the total sale price minus the original cost of an asset.
STAMP DUTIES- These are taxes on documents and not on transactions or persons. The tax is relatively cheap to administer and easy to collect. However, the Finance Act 2020 has replaced stamp duty with electronic transfer levy (ETL) on bank transfers. Consequently, stamp duties previously charged on electronic bank transfer transactions would no longer apply. The EMT Levy is a singular and one-off charge of N50 on electronic receipt or transfer of money deposited in any deposit money bank or financial institution on any type of account on sums of N10,000 or more.
PETROLEUM PROFIT TAX- Companies that engage in oil prospecting and mining business in the petroleum oil industry are assessed to tax under the provisions of the Petroleum Profits Tax Act 1959 as amended.
IMPACT AND EFFECT OF THE FINANCE ACT 2020

Having explained briefly the types of direct taxes, it is worthy of note that the implementation of the Act has brought significant changes in the direct taxes which are highlighted as follows:

Exemption of small businesses from preparing audited financial statements
Specific exemption from Tertiary Education Tax (TET) for small companies with gross turn over below N25,000,000.00 (Twenty-Five Million naira).
Exemption of minimum wages earners from Pay as You Earn (PAYE).
Payment of capital gains tax (CGT) on compensation for loss of employment in excess of N
Reduction of minimum tax from 0.5% to 0.25%
25 provides Deduction of Covid-19 donations.
The various changes introduced by the Finance Act 2020 will impact positively on both the government and the tax payers.

Exemption of small companies from submission of audited accounts will encourage business owners to be tax compliant at minimum or no cost to them.
Deduction of covid-19 donations subject to certain requirements of the act will increase the Net profit of the company through reduction in tax liability.
Reduction of minimum tax from 0.5% to 0.25% of turnover will ultimately lead to profit increase to taxpayers.
However, these exemptions will ultimately reduce the revenue generated by the government.

CONCLUSION

The Finance Act 2020 has brought pragmatic changes to direct taxes in which if effectively implemented will in the long run increase in government revenue and bring eligible tax payers into government tax net in their effort to improve revenue generation drive.

Acknowledgement:

Article contributed by Olusola Olowokere of Direct Taxation Faculty