The Federal Government has made it a requirement for all Nigerians—and non-residents with taxable engagements—to obtain a Tax Identification Number (Tax ID) to open bank accounts and access financial services starting January 1, 2026. This significant requirement for a Tax ID identifies accessible key component of the broader Nigeria Tax Administration Act, 2025, assented to by President Bola Tinubu.
Part II, Section 4 of the Act, provides that every “taxable person” must register with the relevant tax authority and obtain a Taxpayer Identification Card (Tax ID). This taxpayer registration was extended to cover tax collection for all three levels of governments— federal, state, and local—and non-resident persons providing taxable goods, or services to persons located in the Nigeria.
Section 7(3) also enables tax authorities to automatically provide a Tax ID to individuals or entities who do not voluntarily apply. In the event that tax authorities do not want to provide a Tax ID and provide a notice to the applicant in 5 working days, that lack of Tax ID will be autonomically reported.
Section 8 would introduce the tax compliance nexus with various financial services: You may not open bank accounts, engage in insurance, stock trading, or any allied services without a Tax ID. In fact, you may very well not enter into a legally binding contract without a Tax ID in the case of contracts with federal or state governments.
Section 10 further allows the suspension or deregistration of a Tax ID, which is helpful in many business life cycles. In the event that a business suspends its operations, the business must notify the tax authority within 30 days, and, after that, its Tax ID is classified as “dormant”. Permanent cessation will play out very similarly with deregistration.
The law has established the Nigeria Revenue Service (NRS) as the new central tax authority. The Executive Chairman is the Governing Board Chair and has significant authority. The governing board will consist of high-ranking officials from key ministries (Finance, National Planning, Petroleum, etc.), the Attorney-General’s office, the Central Bank, Customs, the Corporate Affairs Commission, and RMFAC. The NRS will be funded out of 4 % of revenue collected (not including petroleum royalties). It seems that this ensures the NRS financial independence.
Why this TIN Requirement Matters:
Greater Tax Compliance: Linking Tax IDs to banking/financial services is a deliberate way to stretch the tax base and improve revenue transparency in Nigeria
Tax Formalization: Tax IDs requirements described in the law for non-residents, government agencies, and businesses is a good way to the same standard for tax administration, a way to minimize gaps
Independence of the Revenue Service: The new supercharged and organized Revenue Service is likely to enforce compliance better and more sustainably
Possible issues ahead:
Access Difficulties: Tax ID required to open a basic banking account could exclude individuals in the informal sector with little documentation.
Administrative Concerns: Whether a reasonable number of institutions have adequate, friendly registration processes, eases and saves time for any person who adopts the system.
Legitimacy: Without clear and visible benefits, such as better infrastructure, improved services, and better outcomes from public authority action, tax IDs may arouse distrust or scepticism.
With the Tax Administration Act, 2025, the groundwork for transformational tax reform is in place. Now that January 2026 is around the corner and compliance is also just around the corner, it remains to be determined how the implementation of the new law will be communicated to the public and effected, not to mention the challenges surrounding financial inclusion and revenues for public authorities.
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