The Federal Government has announced that obtaining a Tax Identification Number (Tax ID) will be compulsory for all Nigerians engaging in banking, insurance, stocks, and allied financial services once the new tax Acts take effect in January 2026.
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The requirement is stipulated in the Nigeria Tax Administration Act, 2025, recently signed into law by President Bola Tinubu. Part II, Section 4 of the legislation mandates that “every taxable person shall register with the relevant Tax Authority and obtain a Taxpayer Identification Card (Tax ID) for the purpose of compliance with tax obligations.” The law also obliges all federal, state, and local government agencies to register and obtain a Tax ID.
Non-resident persons supplying taxable goods or services to Nigerians are likewise required to obtain a Tax ID and are liable for taxation in the country. The Act empowers the tax authority to issue, refuse, suspend, or deregister Tax IDs based on compliance status or cessation of business activities.
Key provisions include:
- Section 8 (1) (c): Tax ID is now a prerequisite for entering contracts with the federal and state governments.
- Section 8 (2): Tax ID is mandatory to operate bank accounts or participate in insurance, stocks, or other allied financial services.
- Section 10: Tax IDs can be suspended or deregistered if a business temporarily or permanently ceases operations, with notification to the tax authority within 30 days.
The Nigeria Revenue Service (NRS) Act, 2025, also signed by the President, establishes the Executive Chairman as the Governing Board Chairman, granting significant powers to the office. The Board includes representatives from the Ministry of Finance, Ministry of National Planning, Attorney-General of the Federation, Ministry of Petroleum, Central Bank of Nigeria, Revenue Mobilisation Allocation and Fiscal Commission, Customs, Corporate Affairs Commission, and Executive Directors appointed by the President.
The NRS will be funded through a 4 percent deduction from the revenues it collects, excluding petroleum royalties. The Chairman’s term is four years, renewable once for another four-year term.
This development is part of the government’s broader tax reforms aimed at enhancing revenue collection efficiency, promoting compliance, and strengthening fiscal accountability across the country.
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