Juliet Jacob 
ABUJA, Nigeria – The Federal Inland Revenue Service (FIRS) has introduced a 10 per cent withholding tax on interest earned from short-term investment instruments, in a shift aimed at strengthening Nigeria’s non-oil revenue base.
The directive covers treasury bills, corporate bonds, promissory notes, and bills of exchange, and mandates banks and financial institutions to deduct the tax at the point of payment.
FIRS Chairman, Dr. Zacch Adedeji, said the policy promotes fairness in the tax system.
“This measure is designed to ensure equity and increase government revenue without discouraging legitimate investment,” he stated.
He explained that investors will receive tax credits where applicable, except in cases where the deduction is considered final. However, interest on Federal Government bonds remains exempt from the new rule.
Analysts note that short-term securities have remained attractive to Nigerian investors due to quick maturity periods and stable yields, but it is uncertain how the policy may influence investment flows.
“All financial institutions must comply with this directive to avoid penalties and interest as stated in tax laws,” Adedeji cautioned.
The directive reinforces ongoing fiscal reforms aimed at reducing dependence on oil earnings and expanding domestic revenue collection.
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Korede Abdullah 
Chukwu Obinna 
Oluwatobi Adu 
Otamere Gladness