FG: No Tax ID, No Bank Account from January 1, 2026 – What Nigerians Must Know

The Federal Government of Nigeria has taken a major step towards strengthening the country’s tax system with a new law that links banking and financial services to tax compliance.

 

From January 1, 2026, all taxable persons will be required to present a Tax Identification Number (Tax ID) before operating or continuing to use bank accounts, insurance policies, pension funds, or investment accounts.

 

The directive was announced by the Presidential Fiscal Policy and Tax Reform Committee, chaired by Taiwo Oyedele, through a Frequently Asked Questions (FAQ) document titled “New Tax Acts and Tax ID – What You Need to Know.”

 

TJ News Nigeria reports that the development stems from the recently enacted Nigeria Tax Administration Act (NTAA), which consolidates and harmonises provisions across existing tax laws to improve compliance, close revenue leakages, and simplify tax processes.

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What the New Rule Means

According to the NTAA, every taxable person—defined as individuals or entities engaged in trade, business, or any form of income-generating activity—must obtain a Tax ID. Banks and financial institutions will be mandated by law to request this number from such customers as a condition for operating accounts.

 

This means that:

• Without a Tax ID, taxable persons may not be able to open or continue using their bank accounts.
• The rule applies not only to banking but also to insurance policies, pension contributions, and investment portfolios.
• Non-taxable individuals (such as unemployed persons or those not engaged in any income-generating activity) are exempt.

 

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Is This Requirement New?

The idea is not entirely new. In fact, since the Finance Act 2019, individuals opening business accounts have been required to provide a Tax Identification Number (TIN).

The difference is that the NTAA now expands, harmonises, and strengthens this requirement. Instead of different numbers issued by different agencies, the law introduces a single, unified Tax ID system.

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Why “Tax ID” Instead of “TIN”?

Under the new framework:

• Individuals will use their National Identification Number (NIN) as their Tax ID.
• Companies and other registered entities will use their Corporate Affairs Commission (CAC) Registration Certificate (RC) number as their Tax ID.

This unification eliminates duplication, reduces paperwork, and ensures a streamlined compliance process.

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Do Nigerians Need a New Tax ID?

For many Nigerians, no new number is required.

• Existing TINs remain valid.
• Individuals without a TIN can simply use their NIN.
• Companies registered with the CAC automatically have their RC numbers recognised as their Tax ID.

This ensures that the transition is smooth and does not impose unnecessary burdens on citizens.

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Will a Tax ID Come as a Card?

No. A Tax ID is not a physical card. It is simply a unique number assigned to taxpayers.

• Nigerians can obtain it free of charge online or at any Federal Inland Revenue Service (FIRS), State Internal Revenue Service (SIRS), or Joint Tax Board (JTB) office.
• No biometrics or special registration is required for those who already have NIN or CAC details.
• Citizens are advised to avoid touts or unofficial agents offering to “process” Tax IDs for a fee.

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Applicability to Businesses

The law applies to all businesses and organisations.

• Unincorporated businesses (e.g., sole proprietors and traders) can use the owner’s personal Tax ID.
• Registered companies, NGOs, and associations must present their TIN/RC number as the Tax ID.
• Businesses that were registered before the CAC digitisation era but never obtained a TIN are required to regularise their status by applying online or at the FIRS.

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What About Nigerians in the Diaspora?

The new tax rule also extends to Nigerians living abroad.

• They can use their NIN to obtain a Tax ID for any financial or investment activity in Nigeria.
• The National Identity Management Commission (NIMC) has introduced simplified online processes to ensure that diaspora Nigerians can register without travelling back home.

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Impact on Foreign Companies

Foreign companies operating in Nigeria are also covered.

• Non-resident entities supplying goods or services in Nigeria must register for a Tax ID.
• Companies that earn only passive income—such as dividends, royalties, or rent—may not need to register but must still provide relevant documentation.
• Businesses effectively managed or controlled from Nigeria are considered residents and are therefore subject to the Tax ID requirement.

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Government Agencies and State-Owned Enterprises

The NTAA goes further by mandating that all ministries, departments, agencies (MDAs), and government-owned enterprises at federal, state, and local levels must also obtain a Tax ID.

This provision ensures that public bodies comply with the same standards as private individuals and corporations.

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Sanctions for Non-Compliance

From January 1, 2026, taxable persons who fail to obtain a Tax ID will face serious consequences:

• They may be denied access to their bank accounts.
• They may be unable to maintain insurance policies, contribute to pensions, or invest in financial markets.
• Additional penalties may be applied under the NTAA’s sanction framework.

Non-taxable individuals, such as students, unemployed persons, or retirees with no taxable income, remain exempt.

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Benefits for Ordinary Nigerians

The Federal Government argues that the reform is not merely punitive but designed to simplify tax administration and bring fairness into the system.

Key benefits include:

• Simplification: NIN and CAC RC numbers serve as Tax IDs, reducing duplication.
• Transparency: Ensures that only those earning taxable income are required to pay.
• Fairness: Protects low-income earners and unemployed individuals from unnecessary tax burdens.
• Revenue Growth: Helps the government generate more funds from the non-oil sector, reducing dependence on crude oil exports.
• Efficiency: Financial institutions will have a single, verifiable database to authenticate taxpayers.

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The Bigger Picture: Tax Reform in Nigeria

The Presidential Fiscal Policy and Tax Reform Committee, inaugurated by President Tinubu in 2023, is tasked with overhauling Nigeria’s tax framework.

The introduction of the NTAA and mandatory Tax IDs is part of broader efforts to:

1. Improve Nigeria’s tax-to-GDP ratio (currently less than 10%).
2. Reduce loopholes exploited for tax evasion.
3. Harmonise federal and state tax systems.
4. Align Nigeria’s tax policies with international best practices.

Taiwo Oyedele has repeatedly emphasised that the reforms are not aimed at punishing Nigerians but at creating a fair, transparent, and growth-oriented tax system.

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Key Highlights of the NTAA

• Effective Date: January 1, 2026.
• Scope: Applies to individuals, businesses, foreign companies, NGOs, and government agencies.
• Identification: NIN for individuals, CAC RC number for companies.
• No Extra Card: Tax ID is digital and verifiable online.
• Exemptions: Non-taxable persons such as unemployed individuals.
• Sanctions: No Tax ID means no access to bank, insurance, pension, or investment accounts.

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Final Note

The new law linking Tax Identification Numbers to financial services marks a bold shift in Nigeria’s tax policy. From January 1, 2026, “No Tax ID, No Bank Account” will become the standard for taxable persons across the country.

While the reform has generated debate, its intent is to simplify compliance, reduce duplication, and ensure fairness in tax administration. For most Nigerians, the process will require no additional effort since their NIN or CAC RC number already qualifies as a Tax ID.

For those yet to comply, the window remains open until 2026 to obtain their Tax ID free of charge and avoid disruptions to their financial activities.