Nigerian Banks Increase Charges Due to Withholding Tax Enforcement

Nigerian banks have raised charges following the enforcement of a 10% withholding tax on interest earned on savings and investment accounts starting January 1, 2026. The Nigerian Revenue Service (NR) initiated this tax enforcement in line with the country's tax laws.

Customers like Tobiloba Adewale and Stephen Oladokun have reported lower payouts and unexpected deductions, affecting their financial plans. Businesses, especially small and medium-sized enterprises, are concerned about the impact on profit margins due to these hidden charges.

Additionally, the Federal Inland Revenue Service (FIRS) has mandated financial institutions to collect and remit a 7.5% Value Added Tax (VAT) on select banking services from January 19, 2026. This move has raised worries about multiple charges eroding benefits and reducing the attractiveness of keeping money in the banking system.