Starting January 1, 2026, all taxable Nigerians will be required to obtain a Taxpayer Identification Number (Tax ID) under the newly signed Nigeria Tax Administration Act, 2025.

The directive, signed into law by President Bola Ahmed Tinubu, makes possession of a Tax ID compulsory for individuals and businesses engaging in banking, insurance, stocks, and other financial services. It also extends to all ministries, departments, and agencies (MDAs) at the federal, state, and local government levels.

Key Provisions of the Act

• Mandatory registration: Every taxable person must register with the relevant tax authority and obtain a Tax ID card to fulfill tax obligations (Part II, Section 4).
• Non-residents included: Foreign individuals or companies supplying taxable goods and services in Nigeria must also register for a Tax ID (Section 6).
• Automatic issuance: Tax authorities can issue a Tax ID to individuals or entities who fail to apply on their own. However, applicants must be informed of rejections within five working days.
• Government contracts: A Tax ID becomes a prerequisite for bidding on federal and state government contracts (Section 8).
• Banking & finance: Opening bank accounts or accessing financial services will also require a Tax ID once the law takes effect.
• Business closures: The Act allows for temporary suspension (“dormant” status) or full deregistration of a Tax ID when businesses close permanently, provided notification is given within 30 days.

Establishment of Nigeria Revenue Service (NRS)

The Act creates the Nigeria Revenue Service (NRS) as the nation’s central tax authority. The NRS will be led by an Executive Chairman who also heads its Governing Board and serves a renewable four-year term.

The Board will include representatives from:

• Ministry of Finance
• Ministry of National Planning
• Attorney-General of the Federation
• Central Bank of Nigeria
• Revenue Mobilisation Allocation and Fiscal Commission
• Nigerian Customs Service
• Corporate Affairs Commission

The NRS will retain 4% of all revenues collected (excluding petroleum royalties) to fund its operations.

Boosting Nigeria’s Revenue Base

The Tinubu administration says the compulsory Tax ID is aimed at tackling tax evasion, expanding Nigeria’s tax net, and formalizing the economy. With a tax-to-GDP ratio of less than 10%, Nigeria lags far behind countries like South Africa (over 25%), making tax reform a key priority amid rising debt and dwindling oil revenues.