The Federal Government has made it mandatory for all taxable individuals and organisations to obtain a Taxpayer Identification (Tax ID) in order to access banking, insurance, stocks, and other financial services, as part of sweeping reforms contained in the Nigeria Tax Administration Act, 2025. The law, signed recently by President Bola Tinubu, comes into effect on January 1, 2026.
According to Part II, Section 4 of the Act, every taxable person must register with the relevant tax authority to obtain a Tax ID for compliance with tax obligations. This requirement also extends to all Ministries, Departments, and Agencies (MDAs) at federal, state, and local levels.
Non-resident entities supplying taxable goods and services in Nigeria are also mandated to register and obtain a Tax ID, as stipulated in Section 6(1), making them liable for tax payments in Nigeria.
Section 8 of the law outlines strict conditions for financial engagement. Specifically, subsection (2) states that no person will be allowed to operate a bank account, or engage in insurance, stock trading, or related services without a valid Tax ID. Additionally, entering into contracts with any tier of government will require the presentation of a Tax ID.
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The Act also empowers tax authorities to issue a Tax ID to individuals who fail to apply, or to refuse issuance based on available information. In such cases, applicants must be informed of the decision within five working days.
There are also provisions for temporary or permanent suspension of Tax IDs if a business ceases operations. Tax authorities must be notified within 30 days of such cessation.
Separately, the Nigeria Revenue Service Act, 2025, grants wide-reaching powers to the Executive Chairman, who also chairs the agency’s governing board. The Service will be funded through a 4% deduction from all revenue it collects, excluding petroleum royalties.
