With the ongoing discussions surrounding the use of Tax Identification Numbers (Tax IDs) over their link to banking and everyday financial transactions, here are a few things to understand about Tax IDs.

In a recent YouTube video, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, addressed public concerns and clarified key provisions of the law.

“You don’t need a Tax ID for your bank account, unless the Nigeria Tax Administration Act (NTAA) mandates the use of a Tax Identification Number (Tax ID) for certain transactions,” Oyedele. Many Nigerians are asking what this means for banking, businesses, and everyday life.

Is the Tax ID mandatory before operating a bank account? So is this a new rule?

No, not at all. This policy has existed since the Finance Act of 2020, which amended section 49 of the Personal Income Tax Act. Since January 2020, anyone operating a bank account for business purposes has needed a tax identification number. What the NTAA does is to provide a legal framework for the harmonisation of identities in order to simplify transactions and tax compliance.

Why does the new law say Tax ID instead of TIN?

Tax ID is simply a unified term previously different agencies like FRS, JTB, and the State IRS issued separately. In the near future, your NIN for individuals or CAC registration number for companies will serve as your Tax ID. This reduces duplication and simplifies compliance.

If I already have a TIN, do I need to apply again for a new tax ID?

No, you don’t. Your existing TIN remains valid. If you already have one. There is no need to register again.

Do Nigerians need to queue or do biometrics to collect a tax ID card?

No, there is no need to do biometrics for the Tax ID, and it is not necessarily a physical card. The Tax ID is simply a unique number linked to your identity. You can apply online at the JTB TIN registration portal, tin.gtb.gov.ng, displayed on screen, or visit any FIRS or NRS state, IRS, or JTB office, and it is completely free of charge. Please, you don’t need to pay any official.

What about businesses? Does this apply to them?

Yes, it does. Every Business Must have a tax ID for small, unregistered businesses. Your personal tax ID is enough for companies, NGOs, or incorporated trustees; a TIN is automatically generated when you register with CAC. If your business was registered long ago without fitting, simply visit FIRS or apply online with your CAC documents.

What about Nigerians in the diaspora? How does this affect them?

Nigerians abroad who operate bank accounts for income and business in Nigeria can obtain a tax ID using their Nigerian identification number (NIN). There is a simplified process to obtain the tax ID via the JTB website shared earlier. Tax ID is not required if the bank account is not used for income or business purposes.

What about foreign companies doing business in Nigeria?

They also need a Tax ID if they operate in Nigeria; non-resident companies that supply goods or services here must register. However, if they only earn passive income like dividends or royalties, they may not need to register, but must still provide relevant details. A foreign company, effectively managed from Nigeria, is treated as a resident and must comply.

Are government agencies exempt from this?

Section 5 of the NTA requires all ministries, departments, agencies, and government-owned enterprises at the federal, state, or local government level to obtain a tax ID.

What happens if a taxable person doesn’t register by January 1, 2026

It is important to know that this is not a new requirement. So most taxable persons who are required to obtain a TIN or tax ID are already compliant. However, any taxable person without a tax ID may have difficulties running their bank account in the near future. But again, this does not apply to individuals who don’t earn income from investment or business.

Will the government make direct tax debit from bank accounts?

No, that is incorrect. First, these provisions are standard globally and currently exist under the old tax laws. Second, it is only a last resort that requires a series of procedures, often involving a court order, where a taxpayer fails to dispute or pay an established tax liability. From a practical perspective, this power is rarely used and may only be worthwhile where a substantial tax payment is due by a high-net-worth individual or a big corporation.

Are Nigerians’ bank deposits safe?

Yes, even if you have millions in your account, your money is safe.

How does all of this benefit ordinary Nigerians?

It is all about building a fairer, more transparent, and simplified system for everyone. When the system is fully built, the NIN or CAC number becomes people’s tax ID with no extra paperwork. It helps to close loopholes, enhances transparency, and ensures everyone who earns taxable income contributes their fair share while protecting low-income citizens who are exempt. (BusinessDay)

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