Nigerians and investors have expressed rising dissatisfaction with the implementation of a 10% Withholding Tax (WHT) on interest earned from savings and short-term investments.
Over the last three days, many dissatisfied investors have flocked to social media sites, particularly X, to express their discontent, as numerous fintech banks began deducting the 10% WHT on earned interest.
while some investors believe the deductions are related to the new tax regulations that went into effect on January 1, 2026, others say that the policy existed before the current administration.
Remember that in October 2025, the then-Federal Inland Revenue Service, now the Nigeria Inland Revenue, authorised banks to begin collecting 10% WHT on interest earned from short-term investments, which had previously been exempt to stimulate higher returns.
Following the implementation of the new tax legislation, several banks—particularly fintech institutions—have began implementing the WHT on interest, causing significant discontent among investors.
Responding to the uproar, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, stated that the new tax legislation did not include WHT on interest.
“The law has always included a withholding tax on interest. “Why is it attributed to the new law?” He enquired in a telephone interview
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), emphasised the importance of more public education in addressing the misunderstanding around Nigeria’s developing tax structure.
“What I can say is that there is ongoing verification and education regarding this new tax structure. There have been some provisions that people have not followed, but with this new dispensation, the amount of compliance has increased.
“So, if there was no compliance before and there is now compliance, it will look to be new legislation or a new provision. So, I believe, increasing compliance is producing a level of compliance, but regardless of how we look at it, this is a new thing that demands more and higher knowledge, enlightenment, and clarification.
“Because there are still cases in which the tax officials say one thing but do another. The state governments say one thing, but the committee says something different.
“Some of the pronouncements are contradictory, which is generating additional complications. So we need to resolve all of these issues and bring greater clarity into the situation. “That is where we stand,
Also speaking, Godwin Oyedokun, a professor of accounting and finance at Lead City University, called the timing of the WHT implementation as callous, given Nigerians’ current economic suffering.
“The current concerns by Nigerians about the 10% Withholding levy (WHT) on savings interest are justified, even though the levy is not new in law.
“Under Nigeria’s tax regime, interest generated on deposits has always been recognised as taxable investment income, with WHT acting as a collection tool.
“For most people, it is seen as a final tax. Financial institutions, particularly fintech platforms that function like banks, are therefore legally compelled to deduct and remit it.
“The issue, however, is one of economic reality and policy sensitivity, rather than legality.
“Savings interest rates in Nigeria are already extremely low, far below inflation.” Many savers are actually losing money in practical terms. Deducting 10% tax from such low returns makes citizens feel penalised for attempting to maintain value rather than creating wealth. This impression exacerbates public discontent and undermines trust in the tax system.
“Economically, the policy could be detrimental. It may discourage savings within the official financial system at a time when Nigeria requires greater financial inclusion and domestic savings to sustain lending and investment.
“Small savers, particularly those brought into the system via fintech platforms, may return to informal cash holdings, undermining financial sector growth and transparency.
“Public outrage is exacerbated by the overall economic context, which includes high inflation, rising living costs, oil price pressures, and currency volatility.
“In such circumstances, further deductions, even if legitimate, appear cumbersome and unsympathetic.
“The government’s primary flaws are in policy conception and communication. There is no exemption barrier to protect low-income savings, no graded structure to differentiate between small depositors and affluent investors, and little public education to ensure that this is not a new or multiple tax.
“A more balanced strategy would involve exempting tiny interest profits, providing alternative treatment to larger investors, and enhancing public information. Tax policy must be both lawful and socially appropriate.
“In summary, the WHT on savings interest may be legally justified, but its current implementation risks harming savings culture, financial inclusion, and public confidence at a time when economic resilience is already fragile,” he stated during a conversation.