Starting January 1, 2026, all Nigerians and non-residents will be required to possess a Tax Identification Number (Tax ID) in order to open or operate bank accounts, or engage in financial services in the country. This is part of sweeping changes introduced by the Nigeria Tax Administration Act, 2025, recently signed into law by President Bola Tinubu.
According to Section 8(2) of the Act, a valid Tax ID will be mandatory for individuals and entities to access banking, insurance, stockbroking, and other allied financial services once the law comes into effect.
“A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall ensure that every taxable person provides a Tax ID,” the law states.
The legislation extends beyond banking to cover a wide range of financial and contractual activities. Section 8 further stipulates that a Tax ID will also be required for entering into contracts with the federal or state governments, reinforcing the government’s efforts to widen the national tax base.
The law also applies to non-residents conducting business in Nigeria. Under Section 6(1), any non-resident entity or individual supplying taxable goods or services or deriving income from Nigeria must register for tax purposes and obtain a Tax ID.
“A non-resident person that supplies taxable goods or services to any person in Nigeria, or derives income from Nigeria, shall register for tax purposes and obtain a Tax ID,” the Act reads.
To drive compliance, Section 7(3) authorizes the tax authorities to automatically assign Tax IDs to individuals or entities who fail to voluntarily register, a measure aimed at closing tax loopholes and curbing evasion.
The law also accounts for temporary or permanent business closures. Taxpayers may suspend or deregister their Tax ID if they are no longer engaged in taxable activities. However, such action must be communicated to the relevant tax authority within 30 days of ceasing operations.
“Where a taxable person temporarily ceases to carry on a trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to suspend its registration for tax purposes within 30 days,” the Act states.
This legislation marks a significant shift in Nigeria’s tax administration framework and is a core part of the Federal Government’s broader strategy to expand the tax net and increase non-oil revenue. Analysts believe the mandatory Tax ID requirement will boost compliance, reduce leakages, and enhance transparency in financial transactions.
Banks and other financial institutions are expected to begin updating their systems and customer onboarding processes to reflect the new regulatory requirements ahead of the January 2026 implementation date.
