Starting January 1, 2026, a new tax regulation in Nigeria will require commercial banks to report all customer accounts with monthly transactions surpassing ₦5 million to the Federal Inland Revenue Service (FIRS) and other tax authorities. This directive, embedded in the 2025 Tax Reform Act, aims to enhance financial transparency, curb tax evasion, and align Nigeria’s fiscal policies with global standards. The National Orientation Agency (NOA) announced this measure as part of broader reforms to ensure taxable income, especially from high-value and informal sector transactions, is effectively monitored.
Under Section 30 of the Act, banks will track and submit monthly reports on accounts with inflows, outflows, or combined transactions exceeding ₦5 million. This move targets high-net-worth individuals and businesses, particularly in the informal economy, to boost government revenue. The reform also introduces taxpayer-friendly provisions, such as raising the personal income tax exemption threshold from ₦500,000 to ₦800,000 annually, offering relief to low-income earners. Additionally, capital gains from selling primary residences and compensation up to ₦10 million for job loss or injury are now tax-exempt.
The law also revises the value-added tax (VAT) distribution model, effective 2026, allocating 10% to the federal government, 55% to states (based on population and consumption), and 35% to local governments. While tax authorities view this as a step toward closing Nigeria’s tax gap, privacy concerns have emerged. Financial experts warn that unclear data protection guidelines could erode customer trust in banks. Stakeholders will closely monitor the policy’s impact on compliance, revenue, and consumer behavior as implementation begins.