Beginning January 1, 2026, Nigerians and foreign residents will no longer be able to open or operate a bank account without a Tax Identification Number (Tax ID), following the enactment of the Nigeria Tax Administration Act, 2025, recently signed into law by President Bola Tinubu.
The new Act is part of government efforts to expand the tax net and improve revenue collection in Africa’s largest economy.
- Section 8(2) makes it compulsory for individuals and businesses to provide a Tax ID when accessing financial services such as banking, insurance, stock broking, and investment transactions.
- The requirement also applies to contracts with federal and state governments, ensuring that contractors are tax-compliant before securing deals.
For non-residents, Section 6(1) mandates tax registration if they supply taxable goods or services or earn income from Nigeria. They, too, must obtain a Tax ID before conducting financial transactions in the country.
Enforcement and Compliance
To close loopholes, Section 7(3) authorizes tax authorities to assign a Tax ID automatically to those who fail to register voluntarily.
Businesses that shut down temporarily or permanently are required to notify tax officials within 30 days, after which their Tax ID may be suspended or deregistered.
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Nigeria has long struggled with a narrow tax base and low tax-to-GDP ratio, relying heavily on oil revenues to fund government spending. The new law aims to change that by ensuring more people and companies are captured within the formal tax system.
Tax analysts believe the policy will:
- Increase government revenues,
- Improve accountability, and
- Discourage tax evasion by linking financial activities directly to tax records.
READ ALSO: Nigeria, Rwanda Sign Tax Treaty to Boost Cross-Border Investment
Banks and other financial institutions are expected to update their systems to integrate Tax ID verification before the January 2026 deadline. Customers, on the other hand, will need to ensure they have valid Tax IDs to avoid disruptions in accessing their accounts or conducting financial transactions.
Industry experts warn that while the policy may initially cause inconvenience for account holders, it could strengthen Nigeria’s financial system in the long run.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
