The Federal Government’s new Nigeria Tax Administration Act (NTAA) is set to reshape the way citizens and businesses interact with the tax system. At the heart of the reforms is the mandatory use of a Tax Identification Number, now called a “Tax ID,” for certain financial and business transactions.
The policy has triggered questions and, in some cases, confusion among Nigerians who worry about how it will affect banking, investments, and everyday life. Here’s what the new law really means.
Who needs a Tax ID?
Under the NTAA, every “taxable person” is required to register with the tax authority and obtain a Tax ID. A taxable person is anyone who earns income through trade, business, or other economic activity. Banks and financial institutions must request a Tax ID from such customers. However, individuals who do not earn income, and therefore are not taxable, are not required to obtain one.
Is this new?
Not exactly. The requirement has existed since the Finance Act of 2019, which made it mandatory to provide a Tax Identification Number (TIN) when opening business accounts. The NTAA now strengthens and harmonises that rule across institutions.
Why “Tax ID” and not “TIN”?
The term “Tax ID” is designed to unify the different identifiers previously issued by the Federal Inland Revenue Service (FIRS), the Joint Tax Board (JTB), and state revenue services. Going forward, an individual’s National Identification Number (NIN) and a company’s Corporate Affairs Commission (CAC) registration number will serve as their Tax ID. This reduces duplication and simplifies compliance.
Do I need a new one if I already have a TIN?
No. Existing TINs remain valid. Nigerians who already have one do not need to register again. Those without a TIN can simply use their NIN or CAC documents to process a Tax ID.
How do I get a Tax ID?
The process is straightforward. Nigerians can register online or visit FIRS, JTB, or state revenue offices. The Tax ID is free and does not require a physical card. Officials have also warned against using touts or middlemen.
What about businesses and foreign companies?
For sole proprietors and unincorporated businesses, the individual owner’s Tax ID is enough. For incorporated companies, NGOs, and other registered entities, a TIN is automatically generated once the business is registered with the CAC.
Foreign companies doing business in Nigeria must also register for a Tax ID. Those only earning passive income such as dividends or royalties may not be required to register, but they must still provide information for tax purposes.
What about Nigerians abroad?
Diaspora Nigerians can obtain a Tax ID using their NIN for banking and investment purposes at home. A simplified process has been rolled out for this category of taxpayers.
Are government agencies exempt?
No. All ministries, departments, agencies, and government-owned enterprises must also register and obtain a Tax ID, according to Section 5 of the NTAA.
What happens if you don’t register?
From January 1, 2026, taxable persons who fail to obtain a Tax ID may be unable to operate bank accounts, pension schemes, insurance policies, or investment accounts. Penalties under the NTAA will also apply.
Why does it matter?
The government says the reform will simplify identification, close loopholes that allow tax evasion, and create a fairer system where everyone who earns taxable income contributes their share. For most Nigerians, the use of NIN or CAC numbers as Tax IDs means little extra paperwork. The bigger impact is expected on businesses and high-income earners who may have used gaps in the system to avoid taxes.
In short, while the law is not entirely new, its harmonisation under the NTAA marks an important step toward building a more transparent tax system. For everyday Nigerians, it means less duplication, clearer rules, and a system designed to protect low-income citizens who are not taxable.
