There is a quiet way many Nigerians get into tax trouble, and it has nothing to do with earning too much money or trying to dodge the law. It happens softly, almost innocently, through bank alerts, vague transfer descriptions, and careless narrations. Money moves in and out of accounts every day, and because we rarely pause to explain what kind of money it is, the system often assumes the worst.
With tax reforms tightening from 2026, this small habit is becoming dangerous.
Here is the simple truth: not all money that enters your account is income. But if it looks like income, smells like income, and has no explanation to show otherwise, the tax authorities may treat it as income. And once something is treated as income, it becomes taxable.
Many people are taxed unnecessarily not because they earned money, but because they failed to describe their transactions properly.
Think of tax authorities like a school teacher marking scripts. If you don’t label your answers clearly, even when you know the right thing, you may still lose marks. In the same way, when money enters your account without context, it can be misread.
Let’s talk about everyday situations.
Your mother sends you money to support you. Your brother helps you with rent. An uncle sends something for upkeep. That money is not income. It is a gift. It is family support. But if the narration is left blank or simply says “transfer,” the system cannot read your mind. From a tax point of view, unexplained money looks like earnings. The simple fix is to make the narration clear. Something as simple as “Gift” or “Family Support” can make all the difference.
Now consider this common scenario: you lent a friend money last month, and today he pays you back. That repayment is not income. You are merely receiving your own money again. But if the narration just says “payment” or “sent,” it may look like someone paid you for a service. A clearer description like “Refund” or “Reimbursement” tells the true story and protects you.
Then there’s the habit many of us have of moving money between our own accounts. Savings account to current account. Business account to personal account. It’s still your money, just wearing different clothes. Yet, without a clear narration, it can appear as if you are receiving fresh income. Writing something like “Personal Transfer” or “Savings Movement” helps show that no new money was earned.
Loans are another area where people get into trouble. When someone lends you money, that money is not your profit. You are expected to pay it back. But if the narration does not say “Loan,” it may be interpreted as income. Later, when tax questions arise, you are left explaining something that could have been settled with one word at the point of transfer.
The same applies when you put your own money into your business. That is not business income. It is your capital. It is your sweat reinvested. Without clarity, however, it may look like the business made sales. Writing “Capital Contribution” helps separate personal investment from business earnings.
These things may sound small, even trivial. But in tax matters, small things matter.
During audits or reviews, tax authorities often rely heavily on bank statements. They look at inflows. They look at frequency. They look at patterns. Clear narrations help them quickly distinguish income from non-income. Poor narrations create suspicion, confusion, and sometimes unnecessary assessments.
This is especially important for people in the informal sector, sole proprietors, freelancers, artisans, and small business owners. Many do not keep elaborate books of account. For them, bank statements often become the primary evidence of financial activity. When those statements are unclear, the burden shifts unfairly onto the individual to prove innocence.
Good narration is not about hiding money. It is about telling the truth clearly.
As Nigeria moves into a stricter tax environment, clarity will be your quiet shield. You don’t need complicated accounting software to start. You don’t need a lawyer on retainer. You only need to slow down for five seconds before sending or receiving money and describe it honestly.
In the end, tax trouble often begins not with wrongdoing, but with carelessness. And carelessness, unlike income, is fully avoidable.
Sometimes, the smartest financial planning is simply learning how to describe your own money properly.
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