Taxable Nigerians have been put on notice that failure to link their Tax Identification Numbers to bank accounts could result in operational difficulties starting January 1, 2026, as the Federal Government moves to tighten tax compliance measures.
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, announced the enforcement plan in an interview posted on his X account Thursday, describing it as a critical component of the administration’s tax modernization drive.
The requirement, anchored in Section 4 of the Nigerian Tax Administration Act scheduled to take effect next year, mandates that all taxable persons must possess and link a valid Tax Identification Number to their banking activities.
While acknowledging that similar provisions existed in the Finance Act of 2020, Oyedele explained that the new legislation provides robust enforcement mechanisms that were previously absent.
“The NTAA now provides a legal framework for its implementation,” he stated, signaling the government’s readiness to enforce compliance more strictly than in the past.
The tax reform chairman clarified the scope of the requirement, emphasizing that it targets income earners and business operators rather than all Nigerians indiscriminately.
“A taxable person is anyone who earns income through trade, business, or any economic activity. So banks must request a tax ID from taxable persons,” Oyedele explained.
He moved quickly to address concerns that vulnerable groups might be caught up in the enforcement net, specifically exempting non-income earners from the obligation.
“This means that individuals who do not earn an income, such as students and dependents, do not need to obtain a tax ID,” Oyedele clarified, attempting to ease fears of blanket application.
For Nigerians already registered with the tax system, Oyedele offered reassurance that no additional administrative steps would be necessary.
“Businesses and income earners with existing TINs do not need to apply for a new one,” he said, indicating that current tax identification numbers remain fully valid under the new framework.
However, the government official delivered a stark warning to those who remain unregistered despite earning taxable income, suggesting that banking access could become severely restricted.
“Any taxable entity without a tax ID may have difficulty running their bank account in the near future,” Oyedele cautioned, leaving little doubt about the potential consequences of non-compliance.
The announcement has generated anxiety among Nigerian bank customers, many of whom question whether the government’s tax administration infrastructure can handle the logistical demands of mass registration and verification.
Banking sector observers worry that inadequate preparation could lead to widespread account freezes affecting compliant citizens caught in bureaucratic bottlenecks, potentially paralyzing business operations and personal finances.
The tax ID linkage requirement represents one element of President Bola Tinubu’s ambitious tax reform package, which received presidential assent in June 2025 and is set for comprehensive rollout when the new year begins.
Government officials justify the reforms as essential for addressing Nigeria’s chronic revenue shortfall, with the country’s tax-to-GDP ratio languishing below 10 percent—among the poorest performances globally and well behind comparable African economies.
Federal authorities have long complained that massive segments of Nigeria’s economy operate informally, with individuals and businesses conducting substantial financial transactions while evading tax obligations entirely.
By creating a mandatory link between banking activities and tax registration, policymakers hope to force underground economic actors into the formal tax net, potentially unlocking billions in additional government revenue.
Critics, however, question whether the enforcement mechanism might prove counterproductive if implementation challenges drive citizens away from formal banking channels and deeper into cash-based informal systems.
The success of the initiative will depend heavily on whether tax authorities can streamline the TIN application process, mount effective public awareness campaigns, and develop fair appeal mechanisms for disputed cases.
Banks across Nigeria are bracing for a potential surge in customer inquiries and registration requests as the deadline approaches, though the government has not yet released detailed operational guidelines for financial institutions.
Key unanswered questions include whether transitional grace periods will be granted, how disputes over taxable status will be resolved, and what recourse customers will have if wrongfully subjected to account restrictions.
Tax administration experts warn that poor execution could generate significant public backlash and potentially undermine broader reform objectives if citizens perceive the policy as punitive rather than constructive.
As 2026 approaches, millions of Nigerian income earners face a choice between proactive compliance with the tax ID requirement or risking potential disruption to their banking relationships and financial activities.
