Nigeria to tax quick investments 10% with push for court-backed financial transparency

Previously, short-term bills were tax-exempt to attract investors and boost returns. With the new rule, investors will receive tax credits for amounts withheld unless the deduction represents a final tax, FIRS clarified.

“All relevant interest-payers are required to comply with this circular to avoid penalties and interest as stipulated in the tax law,” said Zacch Adedeji, Executive Chairman of the FIRS.

However, the agency confirmed that interest on federal government bonds remains exempt from the levy.

At a recent capacity-building workshop for Justices of the Supreme Court, Court of Appeal, and Judges of the Federal High Court, Adedeji stressed that judicial clarity remains vital for implementing such fiscal reforms.

He praised the judiciary’s “sound and consistent” tax rulings, describing them as the foundation for investor confidence and fiscal predictability.

“The judiciary, through its interpretative powers, remains the ultimate arbiter in maintaining the delicate balance between the legitimate powers of tax authorities and the rights of taxpayers,” he said.

Adedeji noted that Nigeria’s evolving tax framework, shaped by the Finance Acts, the Petroleum Industry Act, and the new withholding tax policy, demands stronger synergy between courts and tax administrators.

“Tax disputes that are resolved promptly and based on clear judicial principles foster compliance and contribute to economic stability,” he added, reaffirming FIRS’s commitment to partnership with the judiciary through “knowledge sharing and regular engagement.”

He also highlighted the growing complexities of digital and cross-border transactions in Africa’s tax landscape, arguing that judicial education is now more crucial than ever.

Adedeji expressed optimism that ongoing judicial engagement would “enhance the quality of tax rulings and contribute to a fairer, more efficient tax system” across Nigeria and the African continent.