As Nigerian enter the new year, January 1, 2026, Nigerians will no longer be able to open or operate bank accounts, run businesses, or access financial services without a Taxpayer Identification Number (Tax ID or TIN).
This landmark reform signed by President Tinubu, contained in the newly signed Nigeria Tax Administration Act, 2025, is being described as the most significant change in Nigeria’s financial and tax system in decades.
WHAT THE LAW SAYS
Signed into law by President Bola Ahmed Tinubu in August, the Act makes it compulsory for:
Individuals: No bank account can be opened or operated without a Tax ID.
Businesses: From roadside traders to multinationals, all must register for a Tax ID.
Government Agencies (MDAs): Required to obtain Tax IDs before entering contracts.
Foreign Suppliers: Must register with the new Nigeria Revenue Service (NRS) before doing business in Nigeria.
👉 Under Section 8(2) of the Act, banks, insurers, and stockbrokers will be barred from providing services to anyone without a valid Tax ID.
WHY THE REFORM MATTERS
Nigeria has long struggled with weak tax compliance compared to other African countries:
Nigeria – 10% tax-to-GDP ratio
Ghana – 13%
Kenya – 16%
South Africa – 27%+
Global Average – 34%
Out of 200 million+ citizens, only 10 million are registered taxpayers, while more than 60 million Nigerians hold bank accounts.
This gap explains why revenue remains poor despite Nigeria’s economic size. Past reforms like the Bank Verification Number (BVN) and the National Identification Number (NIN) improved identity management. Now, the Tax ID mandate is seen as the next bold step to widen the tax net and cut reliance on oil.
The Act also abolishes the Federal Inland Revenue Service (FIRS), replacing it with the Nigeria Revenue Service (NRS) — a major institutional shake-up.
THE IMPLICATIONS FOR CITIZENS & BUSINESSES
Bank Customers: No deposits, withdrawals, or transfers without a Tax ID.
Small Businesses: Informal traders must register, creating new compliance obligations.
Corporate Nigeria: Stricter oversight will reduce tax loopholes.
Foreign Firms: Non-resident suppliers must comply before doing business in Nigeria.
Commenting on the tax ID reform, A civil servant in Abuja expressed concern:
“It’s good for accountability, but I fear delays and corruption in the process.”
A Lagos-based tax consultant welcomed it:
“This is long overdue. Without linking tax IDs to financial services, compliance will never improve.”
Meanwhile there are risks and concerns which might lead to Exclusion of the Poor: With 38 million adults unbanked, the reform could sideline vulnerable groups.
Bureaucratic Delays & Corruption: Risk of officials exploiting the registration process.
Awareness Gap: Millions may miss the deadline, creating chaos at tax offices.
5 THINGS NIGERIANS MUST KNOW ABOUT THE TAX ID LAW
Effective Date: January 1, 2026 — no Tax ID, no financial services.
Who Must Register: Individuals, businesses, MDAs, foreign suppliers.
Where It Applies: Banks, insurance, stock market, contracts, and business registration.
Why It Matters: Expands tax net; boosts revenue for development.
Risks: Exclusion, corruption, delays, low awareness.
Q1: What is a Tax ID?
A unique number issued by the NRS for tax purposes, linked to BVN and NIN.
Q2: Who needs it?
Everyone — individuals, businesses, MDAs, and foreign suppliers.
Q3: When does it take effect?
From January 1, 2026.
Q4: How to register?
The NRS will publish guidelines. Expected steps include:
Visit NRS office/center
Fill application form
Provide NIN, BVN, valid ID, address, and business documents (if applicable)
Receive Tax ID
Q5: What happens if I don’t register?
You will be unable to operate bank accounts, access insurance/stockbroking, sign government contracts, or run a registered business.
From January 2026, tax compliance will become a ticket to financial access in Nigeria. This reform is a test of whether government can implement change without worsening hardship. For citizens, it is both a challenge and a call to prepare before the deadline.
