"No Tax ID, No Bank Account: FG Unveils Major Financial Overhaul for Nigerians"

 

The Federal Government has announced a new and mandatory requirement for opening and operating bank accounts in Nigeria. Starting January 1, 2026, both Nigerian citizens and non-residents will be required to possess a Tax Identification (Tax ID) to access banking services.

The new regulation is part of the Nigeria Tax Administration Act, 2025, which was officially signed into law by President Bola Tinubu on June 26, 2025. The Act aims to expand the country's tax net and improve revenue collection.

The new law extends beyond banking, making a Tax ID a compulsory requirement for a wide range of financial and commercial activities, including:

1. Insurance transactions

2. Stock market transactions

3. Contracts with federal and state governments

Key Provisions of the Nigeria Tax Administration Act, 2025:

- Mandatory Registration: Every taxable individual is now required to register with the relevant tax authority to obtain a Tax ID card.

- Government Entities Included: The Act also mandates that all Ministries, Departments, and Agencies (MDAs) at the federal, state, and local government levels must secure their own Tax IDs.

 -Non-Resident Taxation: Non-residents who provide taxable goods and services to individuals in Nigeria will now be required to register and pay taxes within the country.

 -Tax Authority Powers: The Act grants tax authorities the power to issue a Tax ID to individuals who fail to apply. They can also refuse an application if the provided information is deemed insufficient, with feedback to be given within five working days.

 -Business Deregistration: Business owners who suspend or permanently close their operations must notify the tax authority within 30 days. Their Tax ID will then be marked as dormant or deregistered accordingly.

This new legislation is expected to significantly impact how financial and commercial activities are conducted in Nigeria, with the government aiming to streamline tax administration and ensure broader compliance across all sectors.