The Presidential Fiscal Policy and Tax Reform Committee has clarified how Nigeria’s new tax administration rules will affect individuals, businesses, and financial transactions.
Under the Nigeria Tax Administration Act (NTAA), the use of a Tax Identification Number (Tax ID) will be mandatory for a range of activities, from banking to business registration, beginning January 1, 2026.
According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, the NTAA is designed to simplify identification, reduce duplication of records, and close loopholes that enable tax evasion.
“This is not a new policy but a harmonisation of existing requirements,” Oyedele said on social media platform X on Thursday. “For most Nigerians, their National Identification Number (NIN) or Corporate Affairs Commission (CAC) registration number will serve as their Tax ID, eliminating extra paperwork.”
Who needs a Tax ID?
The NTAA requires all taxable persons—defined as individuals or entities carrying out trade, business, or economic activities that generate income—to register with the tax authority and obtain a Tax ID.
Banks and other financial institutions must request a Tax ID from taxable persons when opening or maintaining accounts. However, individuals who do not earn income and are not classified as taxable persons are exempt.
Not a new policy
While the NTAA strengthens the framework, the requirement itself has existed since the Finance Act 2019, which amended section 49 of the Personal Income Tax Act.
Since January 2020, individuals opening business accounts have been required to provide a Tax Identification Number (TIN). The NTAA consolidates these rules under a single “Tax ID” system.
NIN, CAC to replace multiple TINs
The committee explained that the term “Tax ID” now unifies the various TINs issued by the Federal Inland Revenue Service (FIRS), Joint Tax Board (JTB), and state internal revenue services.
Ultimately, an individual’s NIN and a company’s CAC RC number will serve as the Tax ID. Existing TINs remain valid and do not require re-registration.
No physical card, no fees
A Tax ID is simply a unique number linked to your identity, not a physical card. It can be obtained at FIRS, state IRS, or JTB offices or online at no cost. Citizens are warned not to patronise touts or unofficial agents.
Businesses, diaspora Nigerians, foreign entities
For unincorporated businesses, a personal Tax ID is sufficient. For companies, NGOs, and incorporated trustees, a TIN is automatically generated with CAC registration. Nigerians abroad can also obtain a Tax ID using their NIN for banking or investment purposes in Nigeria through a simplified diaspora process.
Foreign companies supplying goods or services in Nigeria must register for a Tax ID. Those earning only passive income such as dividends, interest, royalties, or rent may not need to register but must provide relevant information. Government-owned enterprises and agencies are also required to comply.
Deadline, penalties
Taxable persons who fail to register for a Tax ID by January 1, 2026 risk being unable to operate bank, pension, insurance, or investment accounts and may face sanctions under the NTAA.
Benefits to citizens
The committee emphasised that the reform aims to “ensure fairness so that everyone who earns taxable income contributes their share while protecting low-income citizens who are not taxable.”
By simplifying identification and unifying tax records, the NTAA is expected to improve compliance, reduce duplication, and create a more transparent tax system.
