Andersen Nigeria has moved to counter what it describes as widespread misinformation surrounding the Nigeria Tax Act 2025, warning that viral social-media narratives are fuelling unnecessary panic among salaried workers, small businesses, and bank customers.
In its latest Andersen Digest, published in BusinessDay, the professional services firm systematically dismantles a series of claims circulating online, arguing that many interpretations of the new tax framework are either exaggerated or outright false when read against the actual provisions of the law.
The intervention comes amid heightened public anxiety following President Bola Tinubu’s signing of the Nigeria Tax Act and the Nigeria Tax Administration Act in 2025—reforms designed to modernise tax administration, widen the tax net, and improve compliance.
Myth 1: “Everyone’s salary will be taxed”
One of the most widely shared claims online is that the new tax regime automatically taxes all income earners.
Reality:
Andersen clarifies that the Act preserves existing personal income tax thresholds. Individuals earning ₦800,000 or less annually remain exempt, while higher earners continue to be taxed progressively. There is no provision that introduces blanket taxation of all salaries.
Implication:
Low-income earners are not newly exposed to taxation, and existing reliefs remain intact.
Myth 2: “Every bank transfer or deposit will be taxed”
Another viral claim suggests that routine bank transfers—whether for salary payments, personal savings, or family support—will automatically attract tax.
Reality:
According to Andersen, bank transfers themselves are not taxable events. Tax liability arises from the nature of the underlying transaction, not the movement of funds. Transfers that do not represent taxable income—such as personal savings or internal transfers—do not trigger tax obligations.
Implication:
Banks are not empowered to impose tax on deposits or transfers unless supported by a lawful tax assessment.
Myth 3: “Narration alone can trigger tax deductions”
Social media posts have warned Nigerians to avoid words like “salary,” “gift,” or “family support” in transfer descriptions, claiming such narrations could lead to automatic tax deductions.
Reality:
Andersen states that transaction narrations are not determinative of tax liability. Tax authorities must establish the substance of a transaction through due process, not rely on narration keywords.
Implication:
Narrations alone do not create tax exposure, nor do they empower banks to deduct tax arbitrarily.
Myth 4: “Your bank will deduct tax directly from your account”
Perhaps the most alarming claim is that banks can now unilaterally deduct tax from customers’ accounts under the new law.
Reality:
Andersen is unequivocal: banks cannot deduct tax without a valid tax assessment and formal recovery process. While Section 31 of the Nigeria Tax Administration Act allows recovery from third parties, this power is subject to strict procedural safeguards.
Key safeguard:
Where a bank improperly debits a customer’s account, the bank—not the customer—bears liability.
Myth 5: “Small businesses are finished”
Reality:
The firm notes that small companies with annual turnover below ₦100 million remain exempt from Companies Income Tax, while Value Added Tax (VAT) obligations are unchanged.
Implication:
The Act does not introduce new taxes targeting micro and small enterprises.
Andersen’s Warning: Misinformation Carries Real Economic Costs
Beyond clarifying the law, Andersen warns that unchecked misinformation could undermine confidence in Nigeria’s financial system.
False narratives, the firm argues, risk discouraging financial inclusion, damaging trust in digital banking, and inflaming resistance to reforms that are largely administrative rather than punitive.
Read the Law, Not Social Media Timeline
Andersen concludes that while the Nigeria Tax Act 2025 represents a significant step in modernising Nigeria’s tax administration framework, it does not support the extreme interpretations currently dominating social media discourse.
The firm stresses that tax enforcement remains governed by due process, statutory limits, and clearly defined recovery mechanisms—none of which permit arbitrary debits or automatic taxation without assessment.
As the Digest puts it:
“Where a tax liability has crystallised and the taxpayer has failed to pay within the statutorily allowed time or has failed to convince the tax authority that the alleged liability is invalid, the tax authority may exercise its powers under Section 31 of the NTAA and appoint a third party like the bank, to recover only the unpaid tax liability from any available source of funds in its custody belonging to the affected taxpayer.”
In effect, Andersen’s message to taxpayers is clear: the law provides for enforcement—but only within tightly defined legal boundaries. For individuals and businesses alike, understanding the text of the legislation matters far more than reacting to the noise surrounding it.