Under the new tax administration framework scheduled to take effect from January 1, 2026, banks will be required to submit periodic reports on customer accounts with quarterly turnovers of N25 million and above to the Federal Inland Revenue Service (FIRS) and other relevant agencies. The policy forms part of broader efforts to improve tax monitoring and expand the country’s revenue base without overburdening small businesses and low-income earners.
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, disclosed this in Lagos during a media workshop on the newly consolidated tax laws. He explained that the reporting threshold had in fact been raised from N10 million to N25 million per quarter, stressing that this translates to nearly N100 million in annual turnover before any account attracts regulatory attention.
According to Oyedele, the new framework has been widely misunderstood, with some members of the public wrongly assuming that banks will now report all transactions or allow government agencies to dip directly into customers’ accounts. He clarified that the obligation applies strictly to accounts that meet the stipulated turnover threshold and are used for business purposes.
He further noted that the requirement for business accounts to be linked to a Tax Identification Number (TIN) is not new, having already been provided for under the 2020 Finance Act. What the reforms seek to do, he said, is to improve coordination and efficiency in tax administration rather than introduce arbitrary surveillance.
Oyedele pointed out that Section 4 of the Nigerian Tax Administration Act makes possession of a TIN mandatory for all taxable individuals. However, he added that the rule does not extend to students or dependents, who are exempted from presenting a TIN to operate a bank account.
Addressing widespread anxiety over alleged plans to debit bank accounts for tax defaults, Oyedele was emphatic that no such power exists. He dismissed the claims as false and potentially dangerous, warning that misinformation could undermine public confidence in the financial system.
“Banks will not debit customers’ accounts for tax default,” he said, insisting that neither FIRS, the Central Bank of Nigeria, nor any government agency has the authority to remove money from a taxpayer’s account without due legal process.
He explained that the confusion stemmed from the consolidation of several tax statutes into a single legal code, which some people misinterpreted as the introduction of sweeping new enforcement powers. In reality, he said, the only lawful mechanism for recovering unpaid taxes remains a court-ordered garnishee process, which involves assessment, notification, opportunities for objection, and judicial approval.
Drawing from nearly three decades of experience in tax administration, Oyedele said he had never encountered a situation where funds were removed from a bank account without a court order. He recalled a failed attempt during the tenure of a former FIRS chairman to impose post-no-debit orders on suspected tax defaulters, a move that generated panic but did not recover any revenue.
Warning of the broader economic risks, Oyedele cautioned that unfounded rumours could trigger panic withdrawals and destabilise the economy. He urged the media and the public to help dispel misinformation and focus on the actual intent of the reforms.
The tax reform package, signed into law on June 26, 2025, by President Bola Tinubu, comprises four major legislations: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act. Together, the laws are designed to overhaul Nigeria’s tax system, promote economic growth, enhance revenue generation, and improve the business environment.
Key provisions of the new laws include full tax exemption for individuals earning N800,000 or less annually, a progressive tax rate of up to 25 per cent for higher-income earners, and an increase in the tax-free threshold for compensation for loss of employment or injury from N10 million to N50 million.
The reforms also establish a Tax Ombuds Office, which will act as an independent intermediary between taxpayers and tax authorities, helping to resolve disputes and complaints relating to taxes, levies, and similar charges.
Overall, Oyedele maintained that the reforms are aimed at simplifying compliance, broadening the tax net fairly, and reducing the burden on households and small businesses, rather than instilling fear or penalising ordinary Nigerians.