The Nigeria Revenue Service, NRS, has moved to address concerns surrounding Nigeria’s new tax reforms, assuring taxpayers that the standard Value Added Tax, VAT, rate remains at 7.5 per cent.
Speaking during a Nigeria Revenue Service, NRS, stakeholders' engagement and tax reform sensitisation program in Kano, the Tax Administrator in charge of Kano, Jigawa and Katsina states, Samaila Abdullahi, said the reforms do not automatically authorise deductions from personal bank accounts.
He said the concerns raised by individuals, traders, business owners and other stakeholders regarding the implementation of the new tax laws were understandable, particularly questions about bank transactions, loans, family transfers, business income and the possible impact of the reforms on small businesses.
Abdullahi explained that the new tax framework should be understood through the provisions of the law rather than assumptions or misinformation.
According to him, the tax laws do not, by themselves, permit automatic deductions from personal bank accounts, stressing that tax collection and recovery must follow the applicable legal provisions and procedures.
He further clarified that money received as a loan should not automatically be regarded as business income or profit, explaining that proper documentation is essential to distinguish loans from taxable business transactions.
"For instance, when a trader receives a loan of N500,000, the amount should not automatically be treated as N500,000 in sales or profit, provided the transaction is properly documented," Abdullahi stated.