The Federal Government has clarified details of the new Nigeria Tax Administration Act (NTAA), which mandates Tax Identification Numbers (Tax ID) for specific financial and business transactions.
This update has ignited discussions across the country, with many Nigerians expressing concerns about its impact on daily life, banking, and small businesses.
Tax ID Under the New Law
According to the NTAA, anyone earning income through trade, business, or services must obtain a Tax ID from the authorities. Banks and financial institutions are required to request this ID from such customers.
Officials emphasized that this move is not entirely new. Since 2019, under the Finance Act, business accounts have already required a Tax Identification Number (TIN). The NTAA harmonizes the system by merging multiple IDs. Moving forward, an individual’s National Identification Number (NIN) will serve as their Tax ID, while registered companies will utilize their Corporate Affairs Commission (CAC) Registration number.
Even government agencies and state-owned enterprises are not exempt from this requirement. Nigerians living abroad can also obtain a Tax ID using their NIN for banking and investment purposes.
Deadline and Implications
The government has set January 1, 2026, as the deadline for compliance. Taxable individuals without a Tax ID by this date may lose access to bank accounts, insurance, pensions, and investments.
Authorities argue that this reform will simplify identification, close loopholes that facilitate tax evasion, and enhance the transparency of the tax system. However, they clarified that Nigerians who do not earn taxable income are not required to obtain a Tax ID.
Reactions as Nigerians Debate the Policy
Emmanuel Michael questioned, “How do you define a ‘taxable person’?” Tunjideniran commented, “Why do we need a Tax ID again when we already have NIN? In the US, a social security number suffices, and in the UK, the National Insurance number is used. The proliferation of IDs seems unnecessary.” IamKennyBabs added, “How will banks differentiate between taxable and non-taxable persons? What unique identifier will be used for the unemployed, students, and others?”
Why It Matters
The NTAA represents a significant step in Nigeria’s efforts to modernize its tax system and enhance financial transparency. While the government insists that this measure will facilitate identification, the ongoing debate underscores concerns regarding policy overlaps, implementation challenges, and the potential burden on ordinary citizens.
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