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The Federal Government has made Tax Identification, (Tax ID) compulsory for people getting involved in banking and allied services in the country.
Consequently, all taxable Nigerians are to obtain a Taxpayer Identification when the new tax Acts come into force in January 2026.
The Tax ID is contained in the provisions of the Nigeria Tax Administration Act, 2025, Part II Section 4 of the legislation which was recently signed by President Bola Tinubu.
It says, “Every Taxable person shall register with the relevant Tax Authority and obtain a Taxpayer Identification Card (Tax ID) for the purpose of compliance with tax obligations.”
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“Every ministry, department or agency of the federal, State or Local government shall register and obtain a Tax ID.”
Section 6 (1) of the Act also requires Non-resident persons who supply taxable goods and services to any person in Nigeria to obtain Tax ID, as they shall be obligated to pay tax in Nigeria.
Section 7 (3) empowers the relevant tax authority to issue Tax ID to a person who should have applied for an ID but failed to do so. The relevant tax authority is also empowered to refuse to issue a Tax ID to an applicant based on information available to it. In such a case, the authority shall inform the applicant of its decision within five working days.
Section 8 (1) (c) makes Tax ID a condition for entering into any contract with the Federal and State governments.
Section 8 (2) makes Tax ID mandatory for any person to operate a bank account or get involved in insurance, stocks or allied services in the country, once the Act comes into force from January 1, 2026.
The Act, however, provides an allowance to suspend or deregister the Tax ID, if the holder ceases to undertake trade or business, either temporarily or permanently.
Sector 10 (1) provides, “Where a taxable person temporarily ceases to carry on a trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to suspend its registration for tax purposes within 30 days of such temporary cessation of trade or business.
(2) “The Tax authority shall classify the Tax ID as ‘dormant’ and place it on suspension.
(3) “Where a taxable person permanently ceases to carry on trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to deregister for tax purposes within 30 days of such cessation of trade or business.”
Revenue Service Chairman’s enormous powers.
The Act for the Establishment of the Nigeria Revenue Service, 2025, makes the Executive Chairman its Governing Board Chairman, leaving the occupant with enormous powers.
The Board shall consist of Ex-Officio members, including a representative of the Minister of finance, not lower than the rank of a Director, a representative of the Minister of National Planning; Attorney-General of the Federation; Minister of Petroleum; Central Bank of Nigeria Governor, (not less than a Deputy Governor); the Revenue Mobilisation Allocation and Fiscal Commission; the Comptroller-General of Customs or his representative who shall not be below Deputy Comptroller-General; the Registrar-General of the Corporate Affairs Commission; as well as Executive Directors of the Revenue Service to be appointed by the President.
The Chairman of the Service shall have a four-year term of office, which could be renewed for another four – year term.
Section 22 (a) of the Act provides that the Service shall be funded through 4 percent deduction of revenues it shall collect, except Petroleum Royalties.