Starting January 2026, banks and other financial institutions in Nigeria will be required to report monthly transactions exceeding ₦25 million for individuals and ₦100 million for companies to the tax authorities. This mandate is part of the newly signed Nigeria Tax Administration Act (NTAA) 2025, which introduces broad tax reforms aimed at boosting compliance and revenue generation. Section 29 of the Act, titled “Information to be delivered by bankers and others,” outlines the reporting requirements for banks, insurance firms, stockbroking companies, and similar institutions.
Under the new law, these institutions must submit quarterly returns to the tax authority detailing new account holders and existing customers whose transactions exceed the stated thresholds within a calendar month. The reporting obligation is automatic and not subject to a request from the tax authority. This initiative represents a significant shift toward data-driven tax enforcement, enabling authorities to track high-value financial movements more effectively.
The NTAA also empowers tax authorities to designate banks and other institutions as third-party agents for the recovery of outstanding tax debts. This provision allows them to recover taxes on behalf of the government, particularly when other enforcement measures have failed. Furthermore, courts are granted exclusive jurisdiction in matters involving debts related to failed banks, streamlining legal processes and enhancing judicial oversight.
In an expansion of tax oversight, the law includes strict reporting requirements for Virtual Asset Service Providers (VASPs). These providers—engaged in crypto and other digital asset activities—must submit detailed monthly disclosures regardless of whether they receive formal requests from tax agencies. Required information includes transaction types and values, client details, and identification numbers. This marks Nigeria’s most robust move yet to regulate virtual finance in line with global tax transparency standards.
Overall, the NTAA 2025 signals a new era in Nigeria’s tax system, aiming to close loopholes and broaden the tax base by leveraging institutional cooperation and digital reporting. The reforms are expected to improve tax intelligence, curb evasion, and increase government revenue in the face of ongoing fiscal pressures. Financial institutions and digital platforms are now key players in enforcing compliance, with penalties likely for failure to adhere to the new standards.
Source: Punch