The Nigeria Tax Administration Act (NTAA) has recently mandated that Tax Identification Numbers (TIN) or Tax ID should be used for certain transactions. With this development, many people are likely to have the same question on their mind: What does this mean for businesses, banking, and the everyday choices we make as individuals?

Contents1. “Is it true that everyone must obtain a Tax ID before opening or continuing to operate a bank account?2. “Is this requirement new?3. “Why does the new law say ‘Tax ID’ instead of TIN?4. “If I already have a TIN, do I need a new Tax ID? 5. “Will I need to queue for biometrics to obtain a Tax ID card?6. “Does the Tax ID requirement also apply to businesses? 7. “What about Nigerians in the diaspora?8. “Do foreign companies and non-resident entities need a Tax ID?9. “Are government-owned enterprises and agencies exempt?10. “What happens if a taxable person does not register by 1 January 2026?11. “How will this benefit ordinary Nigerians?

A Tax Identification Number (TIN) or Tax ID is a 13-digit unique number issued to all taxable persons and entities in Nigeria. The ID contains information like the year it was issued, the registry where it was created, the state of registration, a security code, and a final check digit.

Understanding Tax ID laws is a key part of navigating the financial and legal world, whether you are an individual earning a salary, a freelancer, or a business owner. It is a statutory tool that ensures every taxpayer, regardless of the category, can be uniquely verified with the Nigerian tax system.

Taxpayers must have a TIN for filing their annual tax returns and other similar transactions in Nigeria. This way, the tax authorities will be able to properly credit tax payments and track their tax compliance records.

Of course, the benefits of this unique identification number are not unnoticeable, from seamless banking access, fraud reduction, regulatory compliance, inclusivity, to global compatibility.

Also, the Chairman of the Presidential Fiscal Policy & Tax Reforms Committee, Taiwo Oyedele, recently took to his X page (formerly Twitter), to highlight frequently asked questions (FAQs) that will help give clarity to people’s thoughts regarding the law.

The following are the questions accompanied by their answers to help you understand the implications of this law and how it affects you and me:

1. “Is it true that everyone must obtain a Tax ID before opening or continuing to operate a bank account?

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.

2. “Is this requirement new?

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.

3. “Why does the new law say ‘Tax ID’ instead of TIN?

“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.

4. “If I already have a TIN, do I need a new Tax ID?

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.

5. “Will I need to queue for biometrics to obtain a Tax ID card?

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.

6. “Does the Tax ID requirement also apply to businesses?

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.

7. “What about Nigerians in the diaspora?

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.

8. “Do foreign companies and non-resident entities need a Tax ID?

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.

9. “Are government-owned enterprises and agencies exempt?

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.

10. “What happens if a taxable person does not register by 1 January 2026?

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.

11. “How will this benefit ordinary Nigerians?

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.“

There is, however, the misconception that Nigerians lack what it takes to own or operate a bank account without having a Tax ID. This notion sidelines the design of the new Tax ID system.

Nigeria’s tax compliance system is designed to be seamless, not a barrier. By linking the Tax Identification Number (TIN) to existing national IDs like the National Identification Number (NIN) for individuals and the RC Number for businesses, tax compliance is now automatic.

For example, when a Nigerian uses their NIN to open a bank account, they are already considered tax-compliant. The bank simply retrieves their TIN as part of its regular process, making the system easy and efficient.

Far from being a problem, this modern TIN framework is, according to0 the Nigerian authorities, a gateway to financial inclusion, regulatory clarity, and a more globally connected digital economy for Nigeria.

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