Nigerian banks are likely to increase charges on customers as they grapple with stricter tax compliance rules. Financial institutions say they'll need to pass these fresh costs along the line.
Albert Folorunsho manages Pedabo Consulting. He warned that customers will ultimately bear the burden of new compliance spending.
"All of these costs are going to be passed on to the customer, by either the bank that is on-lending to them or whatever the case may be," Folorunsho told reporters.
Banks face mounting pressure to upgrade systems and reporting frameworks. They must ensure every transaction complies with evolving tax rules.
Nigeria's tax reforms aren't just about collecting more revenue. They've fundamentally changed how businesses interact with the tax system itself.
Companies now embed tax considerations directly into daily operations. Every transaction, report, and decision carries compliance weight.
Digital reporting requirements have expanded considerably under the new system. Audit mechanisms are stricter, and rules around tax treatment have become clearer.
This shift means administrative overhead has jumped significantly for financial intermediaries. System upgrades alone represent substantial operational costs.
Nigeria's tax-to-GDP ratio has climbed to about 13.5 percent as of late 2025. Previously, it sat below 10 percent.
Government targets 18 percent by 2027. Yet even that falls short of the 15 percent benchmark needed for core government functions.
Regional comparison tells a sobering story. Ghana manages about 16 percent, Kenya hovers near 15 percent.
Senegal's ratio stands at roughly 20 percent. Nigeria still lags behind all these neighbours.
Authorities designed the reforms to widen the tax base without new headline taxes. A consolidated development levy and targeted tax credits are part of the package.
Infrastructure and energy sectors stand to benefit from investment incentives. But analysts worry about unintended economic consequences.
Folorunsho emphasized the real risk here. "Costs related to tax compliance will likely be passed to customers by financial intermediaries," he said.
Public confusion about the reforms remains widespread. Many Nigerians fear their bank balances could face taxation.
That's simply untrue, according to Folorunsho. "Tax is not on your account balance.
The basis of calculating tax is not bank accounts," he noted.
Olarinde Olufemi serves on the UN Subcommittee on Environmental Tax. He reinforced the distinction for small business owners.
"Taxable income excludes bank account balances; turnover defines small business status," Olufemi explained to reporters.
Officials have also clarified rules around monetary gifts. Money you receive as a gift carries no tax liability.
"A gift is what you receive without any consideration. If you have just received a gift, it is not liable to tax," Folorunsho said.
These clarifications address real anxieties among ordinary Nigerians. Misconceptions about what is taxable have spread quickly.
Yet the broader challenge remains unchanged. How Nigeria manages tax compliance costs without burdening already-stretched consumers continues to occupy policymakers' attention.
