Tax Laws: NRS Chair reaffirms no provisions to tax informal businesses, bank account balances not taxable

*Dr. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service, insists that individual customer’s bank account balances could not be taxed, and there are no extant provisions to tax informal businesses, but to continue encouraging them to formalise their operations in the economy

Isola Moses | ConsumerConnect

Dr. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), has declared that individual customer’s bank account balances could not be taxed.

Adedeji restated this Wednesday, January 28, 2026, when he spoke with the Editorial Board of ThisDay on implementation of the new tax laws , in Abuja, FCT.

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The Chairman of NRS said: “Let me explain why it is difficult to do that now. Salary is a deductible expense.

“The only way to prove that salary was paid is evidence of tax remittance. So the system is self-regulated.”

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He reaffirmed that “your bank account is your asset. Nobody has the right to tax your bank balance. Money in your account does not automatically mean profit.”

Adedeji: NRS lacks framework to tax ‘informal sector’ of economy

Explaining the insinuations and propaganda making the rounds in the public place about the possibility of taxing small businesses in the “informal sector” of the economy, Dr. Adedeji reaffirmed that the NRS currently, lacks a regulatory framework to tax operators in the informal sector of the economy.

Emphasising the existing tax provisions were designed for taxation of the formal economy, he noted the only way to tax informal businesses is to continue to encourage them to formalise their operations in the Nigerian economy.

“On the informal sector, you cannot tax what is informal. That is why they are called informal. To tax them, you must first formalise them.

“Encourage them to register and grow. Once they are formal, they fall into proper categories and can be taxed accordingly,” the NRS Chief explained.

He also averred: “Education and engagement will continue. We have departments for media, engagement, and stakeholder relations so that solutions can be tailored.

“Our goal is to help small businesses grow or, at the very least, sustain themselves.”

Contrary to speculations, Adedeji touched as well touched on the burning issue of Value-Added Tax (VAT), stating it is not imposed on poor Nigerians. Rather, it is “a consumption tax with exemptions”.

According to him, the fundamental aim of the Nigeria Tax Administration Act (NTAA) 2025 is to remove the burden of tax on the poor.

He said the new tax regime had ensured that “only income or profits” are subject to tax, not capital or investments.

As regards the essence of the current administration’s tax reforms efforts, the Executive Chairman of NRS said though the new tax reforms had restored clarity, capacity, and accountability in tax administration, technology and process had also ensured that revenue collection was better tracked in the system.

We’re poised to help businesses grow with tax service partners

In supporting businesses to grow in Nigeria, Dr. Adedeji also said under his leadership at NRS, no businesses would be shut down for noncompliance with tax regulations.

He stated: “If I want revenue to grow, I must help you grow. I am not here to suffocate businesses.

“I am not a policeman or someone chasing bandits. I am like a farmer who prunes a tree, so it can bear more fruit.”

Adedeji further explained: “That is why audits are now part of operations. Auditors work alongside tax officers.

“I have told them never to shut down a business, because sales lost today can never be recovered. If a business does not make profit, there is nothing to tax.

“That is why we now have tax service partners in every operation—to guide, explain, and assist businesses.”

Speaking on tax reforms around VAT, the Executive Chairman of the Service noted that VAT has remained one of the most significant of the interventions, as the Federal Government has given more financial resources to states as subnationals.

He as well disclosed the Federal Government’s decision not to subject food and agricultural items to VAT was to keep food inflation under check, and make food cheaper for consumers.

On accurate information amid disinformation, propaganda in public space

According to Adedeji, correct information management amid a barrage of disinformation and propaganda currently, remains the biggest challenge in the implementation of tax reforms laws in Nigeria.

He, however, assured that the government and other authorities would continue to listen and address emerging concerns in the tax ecosystem.

“Trust is critical. People must first believe that government is not trying to make life harder. That understanding is the foundation.

“We do not claim to be perfect. Information is the biggest challenge right now, especially in an environment like ours.

“We are listening. Where something is not working, we will adjust. That is why we are here,” Adedeji said.

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