Nigerians groan as banks begin tax deductions on transfers

By Chinwendu Obienyi

Bank customers on Wednesday expressed growing frustration following the announcement from banks as regards the implementation of a new tax framework that shifts the burden of electronic transfer levies to senders, a move that many fear will further raise the cost of everyday digital transactions in Africa’s largest economy.

Under the Nigerian Tax Act, which takes effect on January 1, 2026, a N50

electronic money transfer levy on transactions of N10,000 and above will now be deducted from the sender’s account rather than the recipient’s. Banks have begun notifying customers ahead of the rollout, framing the change as a regulatory requirement rather than a new fee.

In a notice sent to customers, Access Bank said the levy would “no longer be charged to the recipient but will now be deducted from the sender’s account,” adding that all taxes would be “duly remitted to the Federal Government in line with regulatory requirements.”

While the amount appears modest, the shift has sparked widespread criticism, particularly among Nigerians who rely heavily on frequent digital transfers to support families, pay bills, or conduct small-scale business transactions. Many customers argue that the levy, when combined with existing bank and fintech transfer charges, represents another incremental squeeze on household finances already strained by inflation and currency weakness.

Ifeanyi Okoye, a small business owner, said, “This may be N50, but Nigerians don’t send money once a month. People send money daily, for food, transport, school fees. Over time, this becomes a material cost.”

The policy change effectively reverses a long-standing practice under which recipients bore the levy, often receiving less than the amount sent. From 2026, recipients will receive the full value of transfers, a development welcomed by salary earners, small traders and families dependent on remittances. However, the visibility of the deduction on the sender’s side has amplified public discontent.

The backlash has been particularly vocal on social media, where users describe the move as another example of “hidden taxes becoming explicit” in Nigeria’s increasingly digital economy. Some fear the added friction could push users back toward informal cash transactions, undermining years of progress in financial inclusion and electronic payments.

Also, For Nigerians in the diaspora, the change introduces another cost layer in an already expensive remittance chain. While international transfer fees and foreign-exchange spreads remain the dominant expenses, the N50 levy applies once funds are credited into Nigerian accounts, meaning overseas senders will ultimately absorb the cost on qualifying transfers.

Omavuebe Gift, a student at University of Central Lancashire, Preston, U.K, said, “With the announcement, I think I would slightly not send money home for now. I cannot be working and all my taxes (one paid here in the U.K and then in Nigeria). I don’t know but I may change my mind.

But in all fairness, things are already hard back at home. The FG needs to consider these things and make things lighter for Nigerians”.

President Bola Tinubu has already stated that the tax law will be effective today. Also, the FG have defended the stamp duty regime as part of efforts to broaden Nigeria’s tax base and improve non-oil revenue collection.

With digital transactions now running into trillions of naira annually, even small levies generate significant revenue when applied at scale. Shifting the tax to senders also aligns Nigeria’s framework with international practices, where transaction costs are typically borne by initiators.

Banks, for their part, say they are merely complying with federal directives and have emphasized that exemptions remain in place, including transfers between accounts owned by the same customer.

Still, analysts warn that policy design matters. “The risk is not the N50 itself,” said an economist at a Lagos consulting firm. “It is the cumulative effect of multiple small charges in a low-income, high-frequency transaction environment.”