Nigeria has introduced a new requirement for individuals and entities seeking to open or operate bank accounts in the country. As of January 1, 2026, all Nigerians and non-residents will need to obtain a Tax Identification Number, also known as a Tax ID. This development follows the recent enactment of the Nigeria Tax Administration Act, 2025, which was signed into law by President Bola Tinubu.
The new legislation makes it compulsory for individuals and businesses to have a Tax ID for various financial services, including banking, insurance, and stock broking. Additionally, the requirement extends to contracts with federal and state governments. Non-residents who supply taxable goods and services or derive income from Nigeria will also be mandated to register for tax purposes and obtain a Tax ID.
The Nigeria Tax Administration Act, 2025, aims to expand the country’s tax net and boost revenue collection. According to Section 8(2) of the Act, the Tax ID is a prerequisite for accessing financial services. Furthermore, Section 6(1) requires non-residents to register for tax purposes if they engage in taxable activities or earn income from Nigeria.
To ensure compliance, the tax authorities have been empowered to assign a Tax ID to individuals or entities that fail to register. The Act also allows for the suspension or deregistration of a Tax ID if a business ceases operations temporarily or permanently, provided the tax authorities are notified within 30 days.
The introduction of the Tax ID requirement is expected to improve tax compliance rates nationwide. Financial institutions are anticipated to adjust their systems and processes ahead of the January 2026 rollout. The move is part of the government’s efforts to enhance revenue collection and expand the country’s tax base.
In preparation for the new requirement, financial institutions will need to make necessary adjustments to their systems and processes. The government’s decision to make Tax IDs compulsory for banking and other financial services is a significant step towards strengthening the country’s tax administration framework. As the January 2026 deadline approaches, it is essential for individuals and businesses to be aware of the new requirement and take necessary steps to comply.
