Banks Begin 10% Tax Deduction on Dollar and Other Foreign Currency Accounts
Nigerian banks have started deducting a 10 percent withholding tax on interest earned from foreign currency deposits, following the implementation of the Nigeria Tax Act, 2025. The deduction took effect from January 1, 2026, in line with the new tax framework approved by the Federal Government.
The development affects customers who earn interest on domiciliary and other foreign currency accounts held with Nigerian banks.
Access Bank Notifies Customers
Access Bank confirmed the new deduction in a notification sent to customers on Wednesday.
In the message, the bank stated that interest earned on foreign currency deposits would now attract a 10 percent withholding tax, in compliance with the Nigeria Tax Act.
The notification assured customers that all deductions would be properly remitted to the Federal Government as required by law.
What the New Rule Means for Account Holders
Under the new tax arrangement:
Interest earned on foreign currency deposits is now taxable
Banks are required to deduct the tax at source
Customers receive net interest after the deduction
The responsibility for remittance lies with the bank, not the depositor
The tax applies only to interest income, not the principal amount held in the account.
Legal Basis for the Deduction
The deduction is backed by the Nigeria Tax Act, 2025, which came into force at the start of the year as part of a wider reform of Nigeria’s tax system.
The Act expanded the scope of taxable income and strengthened withholding tax provisions, especially on passive income such as interest.
President Bola Ahmed Tinubu had earlier stated that the new tax laws would be implemented as scheduled, describing them as necessary to improve revenue collection and reduce reliance on borrowing.
Role of the Nigeria Revenue Service
Enforcement of the new tax rule is being carried out under the Nigeria Revenue Service (NRS), the restructured national revenue authority that replaced the Federal Inland Revenue Service after the passage of the new law.
Banks are required to deduct and remit the tax directly to the government through the NRS.
What Customers Should Expect Going Forward
Customers with foreign currency accounts should expect:
Lower net interest payouts due to the 10 percent deduction
No need to file or pay the tax separately for this income
Deductions to reflect automatically on account statements
Banks are expected to issue further clarifications to customers as implementation continues.
NgEmpower.com will continue to track developments around Nigeria’s tax reforms and their impact on banking, investments, and personal finance.
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