The Central Bank of Nigeria has instructed commercial banks to start charging N50 for deposits of N1000 and above. According to the directive from CBN, banks will now charge N50 for every transaction of N1,000 and above transferred into an account either electronically or using a bank teller. The charge only applies to the account of the receiver. This however, excludes transactions on savings accounts. The instructions does not affect transfers between self accounts
This was contained in a circular sent to commercial banks on Tuesday. This charge is backed by Nigeria’s stamp duties law on financial transactions across commercial banks.
To explain better, if you receive N1,000 or N10m or N5,000 or any amount provided or it is more than N1,000 banks will deduct N50 only.
Analyst believe this instruction is part of the efforts of the new government at improving the tax revenue of the government following the drop in oil revenue. The government has also made it clear that it will be seeking to rely more on taxes to drive its 2016 budget as well as future government revenue drive. Nigeria with a GDP of about N90trillion currently earns less than 8% of that in non oil taxes.
For most Nigerians this is another another added cost to your banking transactions. Banks already charge a token amount for online transfers and also charge fees for deposits over a certain amount. Individual depositors could also now start to rely more on savings accounts for their transactions instead of current accounts in a bid to avoid this charge.
The tax appears not to affect transfers outside Nigeria to a foreign account.