Quick Summary:
Nigerians and investors express outrage over renewed enforcement of 10% Withholding Tax on savings interest, with experts calling for clarity and policy sensitivity.
Nigerians and investors have voiced growing frustration over the implementation of a 10% Withholding Tax (WHT) on interest earned from savings and short-term investments.
Over the past few days, several fintech banks began deducting the tax, prompting widespread complaints on social media, particularly on X (formerly Twitter).
While some investors believe the deductions stem from new tax laws effective January 1, 2026, others argue that the policy predates the new regime.
Background to the Policy
In October 2025, the then Federal Inland Revenue Service (FIRS)—now renamed the Nigeria Inland Revenue (NIR)—directed banks to begin collecting 10% WHT on interest from short-term investments, which had previously been exempted to encourage savings.
Following the implementation of new tax laws, several banks, especially fintech institutions, have now enforced the deductions, sparking public anger and confusion.
Oyedele: “The Tax Is Not New”
Reacting to the controversy, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, clarified that the WHT on interest was not introduced by the new tax laws.
Experts Call for Clarity and Public Education
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), said the confusion reflects poor communication and inconsistent implementation among tax authorities.
Yusuf noted that increased compliance under the new tax dispensation has made old provisions appear new, urging the government to harmonize communication and educate the public.
Oyedokun: “Policy Timing Is Insensitive”
A professor of accounting and finance at Lead City University, Godwin Oyedokun, described the timing of the WHT enforcement as insensitive, given Nigeria’s economic hardship.
He explained that while the tax is legally valid, its implementation amid high inflation and low savings rates makes it socially and economically counterproductive.
Oyedokun warned that the policy could discourage savings, weaken financial inclusion, and erode public trust in the tax system.
He also criticized the lack of exemption thresholds for low-income savers and the absence of a graduated structure distinguishing small depositors from wealthy investors.
Calls for Policy Review
Experts and investors alike are urging the government to review the WHT framework, protect small savers, and improve communication to prevent further public backlash.
They argue that while tax compliance is essential, policy sensitivity and economic context must guide implementation to avoid undermining savings culture and financial stability.
