Effective January 1, 2026, all Nigerian citizens and foreign residents will be mandated to secure a Tax Identification Number, commonly known as Tax ID, to establish or manage bank accounts.
This significant development emerged from the ratification of the Nigeria Tax Administration Act, 2025, which was recently signed into law by President Bola Tinubu.
According to Section 8(2) of the Act, acquiring a Tax ID is imperative for engaging in banking, insurance, stock trading, and a variety of financial services. The obligation further extends to contracts associated with both federal and state governmental entities.
For non-residents, Section 6(1) stipulates that they must register for tax obligations, necessitating the acquisition of a Tax ID should they provide taxable goods and services or earn income from Nigeria.
To ensure adherence, Section 7(3) authorizes tax authorities to assign a Tax ID to individuals or entities neglecting to register. The Act also provides mechanisms for suspending or deregistering a Tax ID if a business halts its operations temporarily or permanently, as long as tax authorities receive notification within a 30-day window.
This legislation aims to broaden Nigeria’s tax base and enhance revenue generation. Experts suggest that this policy could markedly elevate tax compliance levels throughout the nation.
Financial institutions are anticipated to modify their systems and procedures in preparation for the January 2026 implementation.
