By John Umeh
The Federal Government has introduced a new regulation that makes it compulsory for all individuals and businesses to possess a Tax Identification Number (Tax ID) before they can open or operate bank accounts in Nigeria.
The directive, which takes effect from January 1, 2026, is part of the Nigeria Tax Administration Act, 2025, signed into law by President Bola Ahmed Tinubu on June 26, 2025.
Under the new law, no resident or non-resident will be able to operate financial accounts, access insurance services, participate in stock market activities, or engage in contracts with federal and state governments without a valid Tax ID.
Expanded Scope of Compliance
The Act requires every taxable person—including ministries, departments, and agencies across federal, state, and local governments—to obtain a Tax ID. Foreign suppliers of taxable goods and services to Nigerian customers will also be required to register and remit taxes locally.
Tax authorities are empowered to automatically assign Tax IDs to eligible persons who fail to apply. They also reserve the right to decline applications if discrepancies or violations are detected, with decisions expected to be communicated within five working days.
Implications for Businesses
Business operators are mandated to notify the relevant tax authorities within 30 days if they suspend or permanently shut down operations. In such cases, their Tax ID may be marked dormant or deregistered to prevent future misuse.
Boosting Tax Transparency
Officials say the reform aims to strengthen Nigeria’s tax system, curb revenue leakages, and promote transparency in financial dealings. By linking bank accounts and official transactions to Tax IDs, the government expects a broader tax net and improved compliance in both the private and public sectors.
