Nigerian banks will from January 1, 2026 require all taxable individuals and businesses to provide a Tax Identification Number before operating their accounts, using tax compliance as a central enforcement tool.
The measure is backed by Section 4 of the Nigerian Tax Administration Act 2025, which mandates every taxable person earning income through trade, business, or other economic activity to register for a tax ID, strengthening financial regulation across the sector.
Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, explained that the enforcement builds on the 2020 Finance Act but now carries greater legal weight under the newly signed NTAA, boosting revenue administration nationwide.
He noted that students, dependents, and individuals without income are exempt from the requirement because the law targets only those who participate in economic activity, refining the scope of banking requirements for clarity.
Oyedele said the reform aims to reduce widespread tax evasion by ensuring that taxpayers are properly identified, allowing authorities to track obligations more accurately under improved fiscal management.
He added that businesses and individuals already issued TINs need not obtain new ones, as existing tax IDs remain valid for all account-related processes within Nigeria’s evolving regulatory framework.
The directive is expected to affect millions of active account holders, with banks required to verify tax IDs before granting full services, aligning the financial system with global standards for account verification.
Analysts say the move could expand the national tax net significantly by ensuring that informal sector operators, freelancers, and small enterprises register, potentially lifting compliance rates under Nigeria’s economic reforms.
Financial institutions are expected to roll out customer notices and onboarding updates in the coming weeks, warning that failure to provide a tax ID may limit withdrawals, deposits, or digital transactions as part of enhanced KYC protocols.
Public finance experts argue that the measure, if effectively implemented, could boost government revenue without raising tax rates, while also improving transparency in income reporting.
