Banks in Nigeria have begun deducting a 10% withholding tax on interest earned from foreign currency (Forex) deposits, effective yesterday, January 1, 2026, in line with the newly enacted Nigeria Tax Act, 2025.
Customers were notified of the changes through emails sent by commercial banks, including Access Bank, which said the deductions form part of adjustments to banking transactions under the new tax regime.
According to the bank, interest earned on foreign currency deposits will now attract a 10 percent withholding tax, while the Electronic Money Transfer Levy (EMTL) of ₦50—previously charged to recipients on transfers of ₦10,000 and above—will now be deducted from the sender’s account. “Please be assured that all applicable taxes will be duly remitted to the Federal Government in line with regulatory requirements”, the bank said in the notice to customers.
The development follows a directive issued on October 29, 2025, by the former Federal Inland Revenue Service (FIRS), now renamed the Nigeria Revenue Service (NRS), instructing banks to deduct withholding tax on all interest payments from short-term investment securities.
The agency clarified that the tax applies to interest payable to any person, including non-corporate entities, and must be deducted at the point of payment.
The commencement of the deductions coincides with the full implementation of the federal government’s tax reform laws, which President Bola Ahmed Tinubu confirmed would take effect from January 1, 2026.
Speaking last Tuesday, the President described the reforms as a “once-in-a-generation opportunity” to establish a fair, competitive, and resilient fiscal framework, stressing that the measures are not designed to increase the overall tax burden but to improve efficiency, equity, and compliance in the tax system.
