In recent days, social media posts and WhatsApp broadcasts have claimed that Nigerians must add a description or narration when sending money through bank transfers, POS, or mobile money in order to prevent the government from deducting tax.
Short Answer
No. Adding a description or narration to a bank or mobile money transfer does not stop, reduce, or prevent any tax deduction in Nigeria.
There is no law, regulation, or policy that uses transfer descriptions to determine whether tax will be deducted.
Why This Claim Is Trending
The rumour likely emerged due to:
- Increased awareness of ₦50 stamp duty on electronic transfers
- Discussions around digital economy taxation
- Misunderstanding of how banks monitor transactions
However, these discussions have been wrongly interpreted and circulated as misinformation.
How Electronic Transfers Are Taxed in Nigeria
1. Stamp Duty Is Automatic
Under Nigerian law:
- A ₦50 stamp duty applies to electronic transfers of ₦10,000 and above
- The charge is automatic
- It applies to bank apps, USSD, POS, and mobile money
Important: Stamp duty applies whether or not a description is added.
Writing “gift,” “food,” “family,” “school fees,” or leaving the narration blank does not change anything.
2. Descriptions Are Not Used for Tax Deductions
Banks and mobile money operators:
- Do not assess tax using transaction descriptions
- Do not deduct tax based on narration wording
- Do not send narration text to tax authorities for deductions
Descriptions exist solely for reference and record-keeping.
Does the Government Monitor Bank Transfers?
Yes, but not through descriptions.
Tax authorities monitor:
- Frequency of inflows
- Total amounts received over time
- Business activity versus declared income
- Patterns across accounts
This monitoring is based on financial patterns, not the words typed into a narration box.
Mobile Money, POS & USSD Transfers
The same rules apply to:
- POS transfers
- Mobile money wallets
- USSD banking
- Banking apps
✔ Narration has no impact on tax
✔ Stamp duty applies when legally required
✔ No extra tax is deducted because a description is missing
Can Writing “Gift” or “Family” Avoid Tax?
No.
If money received qualifies as taxable income, it remains taxable regardless of what is written in the description.
Taxability depends on:
- Nature of income
- Source of funds
- Frequency of transactions
- Legal classification
It does not depend on narration wording.
Official Position (2026)
There is no directive from:
- Federal Inland Revenue Service (FIRS)
- Central Bank of Nigeria (CBN)
- Nigeria Inter-Bank Settlement System (NIBSS)
…that requires transaction descriptions to prevent tax deductions.
Any message claiming otherwise is false and misleading.
What Nigerians Should Do
- Keep proper financial records
- Register businesses where applicable
- File annual tax returns
- Ignore unverified social media tax advice
- Consult licensed tax professionals when unsure
Conclusion
The claim that adding a description before sending money prevents government tax deductions is false.
Descriptions are for reference only. Stamp duty is automatic, and income tax is assessed separately through lawful processes.
Always rely on official information, not viral messages.
