Beginning January 1, 2026, banks in Nigeria will be legally required to report all customer accounts with monthly transactions of ₦5 million or more to the Federal Inland Revenue Service (FIRS) and other relevant tax bodies.
The directive is part of the 2025 Tax Reform Act, recently signed into law by the federal government.
Under the new regulation, financial institutions must file periodic reports on accounts that record ₦5 million or more in inflows, outflows, or combined transactions within a single month.
Aim: Boost Tax Compliance & Tackle Evasion
According to the federal government, this reform is aimed at:
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Curbing tax evasion, particularly among high-net-worth individuals and businesses in the informal sector.
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Enhancing revenue generation by ensuring that taxable individuals and entities are properly captured within the system.
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Aligning Nigeria with global tax transparency standards and best practices.
Other Major Changes in the 2025 Tax Reform Act
The Act also introduced several tax reliefs and adjustments, including:
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Increase in annual personal income tax exemption from ₦500,000 to ₦800,000.
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Capital gains tax exemption on the sale of a primary residence.
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Tax waiver on compensation payments up to ₦10 million.
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A revised VAT revenue-sharing formula between federal, state, and local governments.
Industry Reactions and Concerns
While tax authorities have praised the move as a necessary step toward closing Nigeria’s tax gap, financial experts and privacy advocates have raised concerns over:
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Potential data misuse
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Inadequate data protection measures
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Increased scrutiny on small business owners and legitimate high-volume traders
Analysts warn that without clear data protection guidelines, customer trust in the banking system may be affected.
What It Means for Bank Customers
If you operate a personal or business account with monthly transactions hitting ₦5 million or more, you are advised to:
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Review and update your tax filings
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Ensure all declared income is accurate and up-to-date
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Consult a tax advisor to ensure compliance ahead of the January 2026 rollout
