The passage of the Nigeria Tax Administration Act (NTAA), 2025, has generated widespread debate across the country, with concerns over the mandatory use of Tax Identification Numbers (Tax ID) for banking and other transactions.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has moved to address what he described as “misconceptions and half-truths” spreading across social and mainstream media about the new law.
In a statement issued on his official X handle on Thursday, Mr Oyedele clarified that the NTAA mandates all taxable persons, individuals or businesses engaged in trade or economic activity to earn income — to register with the tax authority and obtain a Tax ID. He emphasised that banks and financial institutions are required to request a Tax ID only from taxable persons, adding that individuals who do not earn income and are not taxable are exempt.
According to him, “This reform is not entirely new. Since the Finance Act of 2019 amended section 49 of the Personal Income Tax Act, taxable persons have been required to provide a Tax Identification Number when opening business accounts. What the NTAA does is to strengthen, harmonise, and simplify this requirement.”
Clarifications on the New Tax ID
The Committee explained that the term “Tax ID” was adopted to unify the various TINs issued by the Federal Inland Revenue Service (FIRS), Joint Tax Board (JTB), and State Inland Revenue Services. Under the new system, the National Identification Number (NIN) for individuals and the Corporate Affairs Commission (CAC) registration number for companies will serve as the Tax ID, reducing duplication and easing compliance.
Mr Oyedele further noted that Nigerians who already possess a valid TIN do not need to register again. For those without one, a Tax ID can be obtained using the NIN (for individuals) or CAC documents (for businesses). He stressed that the process is free, requires no biometrics, and can be completed at FIRS, JTB, or State IRS offices, or online through their portals.
Businesses, Government Agencies, and Non-Residents
The NTAA also makes it compulsory for companies, NGOs, incorporated trustees, and other registered entities to obtain a Tax ID. For new companies, the TIN is now automatically generated with CAC registration details. Government ministries, departments, and agencies at all levels are equally required to register and obtain Tax IDs.
Foreign companies and non-resident entities doing business in Nigeria are also covered under the law. Non-resident firms supplying goods or services must register, while those earning only passive income — such as dividends, royalties, or rent — may not be required to register, though they must provide relevant details to the authorities.
Deadline and Sanctions
The law sets a compliance deadline of January 1, 2026. Any taxable person who fails to register for a Tax ID by that date may face sanctions, including restrictions on operating bank accounts, pension funds, insurance, or investment accounts, alongside other penalties under the Act.
Benefits for Nigerians
The Committee maintained that the reform is designed to close loopholes that allow tax evasion, promote fairness, and strengthen accountability. For most Nigerians, their existing NIN or CAC RC number will automatically serve as their Tax ID, requiring no further action.
“This is about simplifying identification, reducing duplication, and ensuring fairness so that everyone who earns taxable income contributes their share, while low-income citizens who are not taxable remain protected,” Mr Oyedele stated.
The Committee urged Nigerians not to engage touts or unofficial agents, stressing that obtaining a Tax ID is free and strictly handled by authorised tax institutions.