The Federal Government has announced that starting January 1, 2026, all taxable Nigerians must obtain a Taxpayer Identification Number (Tax ID).
This rule also applies to anyone involved in banking, insurance, stock trading, and other financial services. The directive comes under the newly signed Nigeria Tax Administration Act, 2025.
President Bola Tinubu signed the law to modernize tax administration, expand the tax net, and strengthen government revenue. The Act makes it compulsory for every taxable person to register with the relevant tax authority to obtain a Tax ID.
The requirement also extends to ministries, departments, and agencies at federal, state, and local levels.
Foreign individuals and companies that supply taxable goods and services in Nigeria are also required to register for a Tax ID, ensuring they are part of the country’s tax system. .
Tax authorities are empowered to issue Tax IDs to those who fail to apply, and they also have the right to reject applications if the information provided is insufficient. Applicants must be informed of any rejection within five working days.
The law links the Tax ID directly to government contracts and financial services. From January 2026, no individual or business will be able to open a bank account, access financial services, or enter into contracts with the federal or state government without a valid Tax ID.
For businesses that close, the Act provides for either temporary suspension of the Tax ID, known as “dormant” status, or full deregistration in the case of permanent closure, as long as notification is given within 30 days.
The Act also establishes the Nigeria Revenue Service (NRS) as the central tax authority. The NRS will be led by an Executive Chairman, who also heads the Governing Board, with a four-year renewable term.
The Board will include representatives from key institutions such as the Ministry of Finance, Ministry of National Planning, the Attorney-General of the Federation, the Central Bank of Nigeria, the Revenue Mobilisation Allocation and Fiscal Commission, the Customs Service, and the Corporate Affairs Commission.
To fund its operations, the NRS is allowed to retain 4 percent of all revenues it collects, excluding petroleum royalties. The introduction of compulsory Tax IDs is part of the government’s wider plan to curb tax evasion, formalize the economy, and improve revenue generation.
Nigeria’s tax-to-GDP ratio currently sits below 10 percent, one of the lowest in Africa, compared to South Africa’s, which is above 25 percent.
