St. Paulz Akuche

𝐓𝐡𝐞 𝐍𝐞𝐰 𝐓𝐚𝐱 𝐀𝐜𝐭𝐬 𝐚𝐧𝐝 𝐓𝐚𝐱 𝐈𝐃 – 𝐖𝐡𝐚𝐭 𝐘𝐨𝐮 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐊𝐧𝐨𝐰  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.  𝑸3. 𝑾𝒉𝒚 𝒅𝒐𝒆𝒔 𝒕𝒉𝒆 𝒏𝒆𝒘 𝒍𝒂𝒘 𝒔𝒂𝒚 “𝑻𝒂𝒙 𝑰𝑫” 𝒊𝒏𝒔𝒕𝒆𝒂𝒅 𝒐𝒇 𝑻𝑰𝑵? A3. “Tax ID” is a term that unifies the different TINs issued by the Federal Inland Revenue Service (FIRS), Joint Tax Board (JTB), and State IRS. Ultimately, your NIN (for individuals) and CAC RC number (for companies) will serve as your Tax ID, reducing duplication and simplifying compliance.  𝑸4. 𝑰𝒇 𝑰 𝒂𝒍𝒓𝒆𝒂𝒅𝒚 𝒉𝒂𝒗𝒆 𝒂 𝑻𝑰𝑵, 𝒅𝒐 𝑰 𝒏𝒆𝒆𝒅 𝒂 𝒏𝒆𝒘 𝑻𝒂𝒙 𝑰𝑫? A4. No. Your existing TIN remains valid. If you already have one, you do not need to register again. For those without a TIN, you will need your NIN (individuals) or CAC registration documents (companies) to process your Tax ID.  𝑸5. 𝑾𝒊𝒍𝒍 𝑰 𝒏𝒆𝒆𝒅 𝒕𝒐 𝒒𝒖𝒆𝒖𝒆 𝒇𝒐𝒓 𝒃𝒊𝒐𝒎𝒆𝒕𝒓𝒊𝒄𝒔 𝒕𝒐 𝒐𝒃𝒕𝒂𝒊𝒏 𝒂 𝑻𝒂𝒙 𝑰𝑫 𝒄𝒂𝒓𝒅? A5. No. The Tax ID is simply a unique number linked to your identity, not necessarily a physical card. To obtain it, you can visit the nearest FIRS, State IRS, or JTB office, or apply online via their official websites. It is free of charge. Please do not patronise touts or unofficial agents.  𝑸6. 𝑫𝒐𝒆𝒔 𝒕𝒉𝒆 𝑻𝒂𝒙 𝑰𝑫 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒎𝒆𝒏𝒕 𝒂𝒍𝒔𝒐 𝒂𝒑𝒑𝒍𝒚 𝒕𝒐 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔𝒆𝒔? A6. Yes. For unincorporated businesses, your personal TIN/Tax ID is sufficient. For companies, NGOs, incorporated trustees, and other registered entities, a TIN will be automatically generated with your CAC registration details. If your business was registered without a TIN in the past, simply visit the FIRS or apply online with your CAC documents to get one.  𝑸7. 𝑾𝒉𝒂𝒕 𝒂𝒃𝒐𝒖𝒕 𝑵𝒊𝒈𝒆𝒓𝒊𝒂𝒏𝒔 𝒊𝒏 𝒕𝒉𝒆 𝒅𝒊𝒂𝒔𝒑𝒐𝒓𝒂? A7. Nigerians abroad can obtain a Tax ID using their NIN for banking or investment purposes in Nigeria. A simplified process has been introduced for diaspora Nigerians. Visit the NIMC website for details.  𝑸8. 𝑫𝒐 𝒇𝒐𝒓𝒆𝒊𝒈𝒏 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 𝒂𝒏𝒅 𝒏𝒐𝒏-𝒓𝒆𝒔𝒊𝒅𝒆𝒏𝒕 𝒆𝒏𝒕𝒊𝒕𝒊𝒆𝒔 𝒏𝒆𝒆𝒅 𝒂 𝑻𝒂𝒙 𝑰𝑫? A8. Yes, if they do business in Nigeria. A non-resident company supplying goods or services to Nigerian customers must register for a Tax ID. However, those earning only passive income (dividends, interest, royalties, rent) may not need to register, though they must provide relevant information. A company registered abroad but effectively managed or controlled in Nigeria is treated as resident and must comply.  𝑸9. 𝑨𝒓𝒆 𝒈𝒐𝒗𝒆𝒓𝒏𝒎𝒆𝒏𝒕-𝒐𝒘𝒏𝒆𝒅 𝒆𝒏𝒕𝒆𝒓𝒑𝒓𝒊𝒔𝒆𝒔 𝒂𝒏𝒅 𝒂𝒈𝒆𝒏𝒄𝒊𝒆𝒔 𝒆𝒙𝒆𝒎𝒑𝒕? A9. No. Section 5 of the NTAA requires all ministries, departments, agencies, and government-owned enterprises (federal, state, or local) to register for tax and obtain a Tax ID.  𝑸10. 𝑾𝒉𝒂𝒕 𝒉𝒂𝒑𝒑𝒆𝒏𝒔 𝒊𝒇 𝒂 𝒕𝒂𝒙𝒂𝒃𝒍𝒆 𝒑𝒆𝒓𝒔𝒐𝒏 𝒅𝒐𝒆𝒔 𝒏𝒐𝒕 𝒓𝒆𝒈𝒊𝒔𝒕𝒆𝒓 𝒃𝒚 1 𝑱𝒂𝒏𝒖𝒂𝒓𝒚 2026? A10. Without a Tax ID, a taxable person may not be able to operate bank accounts, insurance policies, pension accounts, or investment accounts. Sanctions also apply under the NTAA. However, individuals who are not taxable persons are not required to obtain a Tax ID.  𝑸11. 𝑯𝒐𝒘 𝒘𝒊𝒍𝒍 𝒕𝒉𝒊𝒔 𝒃𝒆𝒏𝒆𝒇𝒊𝒕 𝒐𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝑵𝒊𝒈𝒆𝒓𝒊𝒂𝒏𝒔? A11.  The aim is to simplify identification, reduce duplication, and close loopholes that allow tax evasion. For most individuals and businesses, their NIN or CAC RC number will serve as their Tax ID with no extra paperwork. This ensures fairness so that everyone who earns taxable income contributes their share while protecting low-income citizens who are not taxable.  Follow us on social media and our WhatsApp channel for regular updates on the new tax reform laws.  — 𝘗𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 𝘍𝘪𝘴𝘤𝘢𝘭 𝘗𝘰𝘭𝘪𝘤𝘺 & 𝘛𝘢𝘹 𝘙𝘦𝘧𝘰𝘳𝘮𝘴 𝘊𝘰𝘮𝘮𝘪𝘵𝘵𝘦𝘦

𝐍𝐢𝐠𝐞𝐫𝐢𝐚'𝐬 𝐓𝐚𝐱 𝐑𝐞𝐟𝐨𝐫𝐦 𝐋𝐚𝐰𝐬 𝐇𝐚𝐯𝐞 𝐁𝐞𝐞𝐧 𝐏𝐮𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐢𝐧 𝐭𝐡𝐞 𝐎𝐟𝐟𝐢𝐜𝐢𝐚𝐥 𝐆𝐚𝐳𝐞𝐭𝐭𝐞 Enacted on 26 June 2025, the new tax laws are, the - 1. Nigeria Tax Act, 2025 (NTA) 2. Nigeria Tax Administration Act, 2025 (NTAA) 3. Nigeria Revenue Service (Establishment) Act, 2025 (NRSEA) 4. Joint Revenue Board (Establishment) Act, 2025 (JRBEA) Key highlights include: 𝑯𝒊𝒈𝒉 𝒆𝒙𝒆𝒎𝒑𝒕𝒊𝒐𝒏 𝒕𝒉𝒓𝒆𝒔𝒉𝒐𝒍𝒅 𝒇𝒐𝒓 𝒔𝒎𝒂𝒍𝒍 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 - 0% tax for a small company, defined under the NTAA as having an annual turnover not exceeding N100m with a total fixed assets less than N250m. 𝑳𝒐𝒘𝒆𝒓 𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆 𝒕𝒂𝒙 𝒓𝒂𝒕𝒆 𝒇𝒐𝒓 𝒍𝒂𝒓𝒈𝒆 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 – Provisions to enable the reduction of tax rate from 30% to 25% for large companies effective from a date as may be determined in an Order by the President on the advice of the National Economic Council. 𝑯𝒊𝒈𝒉 𝒕𝒉𝒓𝒆𝒔𝒉𝒐𝒍𝒅𝒔 𝒇𝒐𝒓 𝒕𝒐𝒑-𝒖𝒑 𝒕𝒂𝒙 – Exemption threshold of N50b revenue for local firms and €750m equivalents for multinationals. 𝑬𝒄𝒐𝒏𝒐𝒎𝒊𝒄 𝒅𝒆𝒗𝒆𝒍𝒐𝒑𝒎𝒆𝒏𝒕 𝒊𝒏𝒄𝒆𝒏𝒕𝒊𝒗𝒆 - Tax credit at the rate of 5% per annum for eligible priority sector investments. 𝑷𝒂𝒚𝒎𝒆𝒏𝒕 𝒐𝒇 𝒕𝒂𝒙𝒆𝒔 𝒊𝒏 𝑵𝒂𝒊𝒓𝒂 - Option to pay taxes on foreign currency transactions in Naira at the prevailing exchange rate in the official foreign exchange market. 𝑪𝒐𝒎𝒎𝒆𝒏𝒄𝒆𝒎𝒆𝒏𝒕 - The NTA and NTAA will commence on 1st January 2026 while the NRSEA and JRBEA have a commencement date of 26 June 2025 to ensure readiness of the relevant institutions ahead of full implementation in 2026.   Download copies of the laws here: bit.ly/NewTaxReformActs