The Nigeria Tax Administration Act (NTAA) has reinforced the requirement for a Tax Identification Number (Tax ID) for certain transactions, including opening bank accounts.
According to Fiscal Reforms Nigeria, the Act makes clear that only “taxable persons,” those who earn income from trade, business, or other economic activity, are mandated to register and obtain a Tax ID.
The NTAA does not introduce a new rule but clarifies an existing policy that has been in effect since the Finance Act of 2019. It seeks to create a fairer and more transparent tax system while protecting citizens’ rights.
The statement reads: “The Nigeria Tax Administration Act (NTAA) mandates the use of Tax Identification Numbers (Tax ID) for certain transactions. Understandably, many Nigerians have questions about what this means for banking, businesses, and everyday life.
“This FAQ provides answers, clarifies misconceptions, and highlights the safeguards in place to protect citizens while ensuring a fairer, more transparent tax system.
“Frequently Asked Questions
“Q1. Is it true that everyone must obtain a Tax ID before opening or continuing to operate a bank account?
A1. Yes, but with some clarifications. Section 4 of the NTAA requires all taxable persons to register with the tax authority and obtain a Tax ID. A “taxable person” is someone who carries on trade, business, or other economic activity to earn income. Banks and other financial institutions are required to request a Tax ID from taxable persons. Individuals who do not earn income and are not taxable persons are not required to obtain a Tax ID.
“Q2. Is this requirement new?
A2. No. This is not a new policy. It has been in place since the Finance Act, 2019, which amended section 49 of the Personal Income Tax Act. Since January 2020, individuals opening a business account have been required to provide a Tax Identification Number (TIN). The NTAA only strengthens and harmonises this requirement.”
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Source: X | fiscalreformsng
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