From January 2026, banks, insurance companies, stockbrokers, and other financial institutions in Nigeria will start submitting detailed monthly reports of large transactions to the tax authorities, following a new tax law signed by President Bola Ahmed Tinubu.
The directive is part of the Nigeria Tax Administration Act (NTAA), which is among the tax reform bills recently approved by the President. The Act introduces stricter financial reporting duties on both individual and corporate account holders, as part of a broader strategy to improve revenue generation and tackle tax evasion.
According to Section 29 of the newly signed law, titled “Information to be delivered by bankers and others”, banks and other financial institutions are required to prepare quarterly reports for tax authorities. These reports must include details of customers with monthly transactions above specified thresholds. For individuals, the law targets any account with a cumulative monthly transaction of N25 million or more, while for companies, the benchmark is N100 million in a month.
In simple terms, once the total transactions in a single month reach N25 million for an individual or N100 million for a company, the bank must include that customer’s information in its report to the tax body. This includes the names and addresses of new and existing customers who fall into this category.
The new tax rule will affect banks, insurance firms, stockbroking companies, and other financial service providers like fintechs and mobile money platforms. These institutions must submit this data even if they are not asked to do so. The idea is to give the tax agencies enough information to monitor high-value transactions and identify potential cases of tax default.
The NTAA goes further to empower tax authorities to use these financial institutions as third-party agents to recover unpaid taxes. That means if someone owes the government tax and has not paid after several notices and court processes, the tax authority can appoint their bank or any approved recovery firm to collect the money directly from the person’s account or asset.
In cases where the tax debt is linked to a failed bank, the law says only the courts can handle recovery matters. This provision overrides any other legal agreement or arrangement that may have existed before the law was signed.
The Act states: “The court shall have exclusive jurisdiction to hear and determine all matters brought before it concerning the recovery from any person of any debt owed to a failed bank, which remains outstanding as at the date of closure of the business of the failed bank.”
Also, when the unpaid debt is considered large, the tax agency can assign part or all of the debt to a third party, such as a debt recovery agent. But this can only happen after the taxpayer has been served with notice, given enough time to pay, and all legal enforcement steps have been taken.
In addition to traditional financial institutions, the NTAA also targets operators in the virtual asset space. From January 2026, Virtual Asset Service Providers (VASPs) in Nigeria will be required to file monthly transaction reports with the tax authorities. These include firms involved in cryptocurrency exchanges, wallets, asset custody, or any other digital finance services.
According to Section 25 of the law, any individual or company that deals in virtual asset services must disclose detailed transaction data each month. This includes the type of service provided, the transaction dates, the value of the digital assets involved, and the total sales value. The law also mandates the disclosure of personal details of customers involved in such transactions.
For every customer, the service provider must submit the person’s name, address, phone number, email, and tax identification number. If the customer is an individual, their National Identification Number (NIN) must be included. The VASPs are also expected to provide the same details for any counterparty involved in the transaction.
Even if the tax authority does not request these details formally, the law allows it to demand further information at any time, in any format it chooses. This means service providers must keep full records and stay ready to respond quickly.
With these new measures, the Federal Government is hoping to strengthen its tax net, reduce leakages, and ensure that high earners and big corporations pay their fair share of taxes.
Financial experts believe the new law will increase compliance but may also place more reporting pressure on banks and digital finance operators. However, the government insists that the policy is necessary to boost public revenue and improve fiscal transparency.
