Nigeria to Automatically Deduct Taxes From Bank Accounts of Citizens With Unexplained Income

The federal government of Nigeria will, starting in 2026, begin automatically deducting taxes from the bank accounts of citizens with unexplained income, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has announced.

Speaking on the Mic On Podcast hosted by Seun Okinbaloye, Oyedele said the government plans to implement modern taxation systems to monitor incomes and ensure that individuals who fall within taxable brackets—but are underpaying or not paying taxes at all—have the correct amounts deducted directly from their bank accounts.

“Instead of relying on people to voluntarily declare their income, we want to use the system to identify it. Your primary role is to declare your income, but the government will also carry out a fiscal valuation,” Oyedele explained.

He added that if a taxpayer cannot account for unexplained income, “and your tax liability is, say, N1 million, the system will debit your bank account after due process. This ensures taxes are collected professionally, without harassment or public confrontation.”

Oyedele further clarified that individuals employed by religious organisations, including churches and mosques, are not exempt from taxation. “The institution itself may not pay taxes unless it engages in commercial activities, but employees—whether pastors, imams, or choir members—are workers like anyone else. Their income is taxable if it exceeds the threshold.”

He added that low-income earners within religious organisations, whose income falls below the taxable threshold, will be exempt. “The law is neutral and applies to everyone regardless of gender, religion, ethnicity, or personal beliefs. If you earn below the threshold, you are exempt. If above, you pay tax.”

Oyedele also stressed that taxation will be progressive: “If you’re a low-income earner, your tax will be lower; if you’re a high-income earner, your tax will increase.”

The Chairman said the government aims to create a fair, efficient, and modern tax collection system, reducing reliance on manual reporting and preventing revenue leakages.

“This is about building a society where taxation is fair and systematic. Nigeria should not lag behind other modern nations in this regard,” Oyedele said.