Nigerians and investors have expressed growing frustration over the implementation of a 10 percent Withholding Tax (WHT) on interest earned from savings and short-term investments.

Over the past three days, many aggrieved investors have taken to social media platforms, particularly X, to vent their displeasure, as several fintech banks commenced the deduction of the 10 percent WHT on earned interest.

It was reported that while some investors believe the deductions are linked to the new tax laws that took effect on January 1, 2026, others argue that the policy predates the new regime.

Recall that in October 2025, the then Federal Inland Revenue Service, now the Nigeria Inland Revenue, directed banks to begin collecting 10 percent WHT on interest earned from short-term investments, which had previously been exempted to encourage higher returns.

Following the introduction of the new tax laws, some banks— particularly fintech institutions— have now begun enforcing the WHT on interest, a move that has stirred widespread frustration among investors.

Reacting to the controversy, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, clarified that WHT on interest was not introduced by the new tax laws.

“Withholding tax on interest has always been in the law. Why is it being attributed to the new law?” He queried in a telephone interview with DAILY POST on Monday.

Adding another perspective, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stressed the need for more public education to address confusion surrounding Nigeria’s evolving tax regime.

“What I can say is that there is continuous verification and education about this new tax regime. There are some provisions that have been there that people are not complying with, but now with this new dispensation, the compliance level has been elevated.

“So when you have a situation where there was no compliance, now there is compliance, it will appear as if it is new legislation or a new provision. So the increased level of compliance, I think, is also creating a level of compliance, but no matter how we look at it, this is a new thing, and this thing requires more and increased education and enlightenment and clarification.

“Because there are still instances where the tax authorities will say something, but a different thing will be implemented. The state governments are saying something, and the committee is saying a different thing.

“There is a bit of contradiction in some of the pronouncements, so this is also creating more problems. So we need to resolve all of these things and bring more clarity into it. That is where we stand,” he told DAILY POST.

Also speaking, a professor of accounting and finance at Lead City University, Godwin Oyedokun, described the timing of the WHT implementation as insensitive, given the current economic hardship faced by Nigerians.

“The recent complaints by Nigerians over the 10 percent Withholding Tax (WHT) on savings interest are understandable, even though the tax itself is not new in law.

“Under Nigeria’s tax framework, interest earned on deposits has always been treated as taxable investment income, and WHT serves as a collection mechanism.

“For most individuals, it is regarded as a final tax. Financial institutions, including fintech platforms operating like banks, are therefore legally required to deduct and remit it.

“The problem, however, lies less in legality and more in economic reality and policy sensitivity.

“Savings interest rates in Nigeria are already extremely low and far below inflation. Many savers are effectively losing money in real terms. Deducting 10% tax from such minimal returns makes citizens feel penalized for simply trying to preserve value, not for generating wealth. This perception fuels public frustration and weakens trust in the tax system.

“Economically, the policy may be counterproductive. It risks discouraging savings within the formal financial system at a time when Nigeria needs stronger financial inclusion and higher domestic savings to support lending and investment.

“Small savers, especially those drawn into the system through fintech platforms, may revert to informal cash holding, which undermines financial sector growth and transparency.

“Public anger is also amplified by the broader economic climate— high inflation, rising living costs, energy price pressures, and currency instability.

“In such conditions, additional deductions, even if lawful, feel burdensome and insensitive.

“The government’s key missteps are in policy design and communication. There is no exemption threshold to protect low-income savers, no graduated structure that distinguishes between small depositors and wealthy investors, and limited public education to clarify that this is not a new or multiple tax.

“A more balanced approach would include exempting small interest earnings, applying differentiated treatment for larger investors, and improving public communication. Tax policy must not only be lawful but also socially responsive.

“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 said in an interview with DAILY POST on Monday.