Beginning January 1, 2026, Nigerians and non-residents alike will be barred from opening or operating bank accounts without a valid Tax Identification Number (Tax ID). This sweeping directive is part of the newly enacted Nigeria Tax Administration Act, 2025, signed into law by President Bola Tinubu. The reform marks one of the most significant overhauls of Nigeria’s financial and tax systems in recent history.
Under the new law, financial institutions—including banks, insurers, and stockbrokers—are prohibited from offering services to individuals or entities lacking a Tax ID. This requirement extends beyond banking to include insurance policies, stock market transactions, and government contracts at both federal and state levels. Even foreign suppliers conducting business with Nigerian clients must register and obtain a Tax ID.
The legislation also establishes the Nigeria Revenue Service (NRS), replacing the Federal Inland Revenue Service (FIRS) as the central body for tax collection and administration. The NRS will be funded through a 4 percent deduction from all revenues collected, excluding petroleum royalties.
Authorities are empowered to automatically issue Tax IDs to individuals who fail to apply, and may reject applications if discrepancies arise. Businesses that suspend or shut down operations must notify the tax authority within 30 days to have their Tax ID marked as dormant or deregistered.
This reform aims to broaden Nigeria’s tax base, reduce revenue leakages, and enforce greater compliance. With over 60 million bank account holders but only around 10 million registered taxpayers, the government sees this move as a critical step toward fiscal accountability and economic stability.
