The Digest:
Nigerian banks will commence deducting a 10 percent withholding tax on interest earned from foreign currency deposits starting January 1, 2026, in line with new fiscal reforms. The policy, announced to customers by institutions such as Access Bank, expands the government’s revenue base in alignment with the Nigeria Tax Act, 2025.
Key Points:
- The new 10% tax applies to interest earned on all foreign currency (FCY) deposits.
- The policy was communicated to customers via email, with assurances of full remittance to the Federal Government.
- This follows a directive from the Nigeria Revenue Service on October 29 to deduct withholding tax from interest on short-term investment securities.
- President Tinubu confirmed that the implementation of the new tax laws would begin on schedule.
- Simultaneously, the Electronic Money Transfer Levy of N50 will now be deducted from the sender’s account for transfers of N10,000 or more.
- Tinubu framed the reforms as a “once-in-a-generation opportunity” to build a fair and robust fiscal foundation, not to raise overall taxes.
- The move signifies a deepening of regulatory oversight on capital and cross-border financial flows.
Sources: Business Day
