Nigerian Banks Deduct 10% Tax on Savings Account Interest Under New Laws

Nigerian banks such as Access Bank (NGX: ACCESSCORP), Zenith Bank (NGX: ZENITHBANK), and UBA (NGX: UBA), along with fintech platforms like PiggyVest, have initiated deductions of 10% withholding tax from savings account interest in compliance with new tax laws effective from January 1, 2026. The Nigeria Revenue Service (formerly FIRS) mandated financial institutions to deduct this tax on interest payments from short-term investments and savings instruments.

The move aims to enhance non-oil revenue and increase tax compliance. Savers, including Adeniyi Joseph, have expressed dissatisfaction over the unexpected deductions, with some questioning the transparency of the process.

Financial advisory firm Forvi Mazar clarified that withholding tax is not an additional tax but a prepayment of income tax. The new tax regime seeks to promote formal savings and improve tax transparency in Nigeria.