New Tax Law Directs Banks To Report Accounts With ₦25 Million Quarterly Turnover To Tax Authorities

By Godson Ikoro

As the country prepares to implement its new tax reform laws by January 1, 2026, commercial banks will thenceforth report customer accounts with quarterly turnovers of N25 million and above to tax authorities under Nigeria’s newly gazetted tax reform laws.

The chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, stated this, Friday at a one-day workshop on the new tax framework organised by the Federal Inland Revenue Service (FIRS) to journalists in Lagos.

He explained that the reforms significantly raised the reporting threshold from N10 million to N25 million per quarter, noting that the figure translates to an annual turnover of N100 million, marking a shift aimed at improving tax compliance while easing the reporting burden on smaller account holders.

This requirement, Oyedele further explained, is not entirely new, because the Finance Act of January 13, 2020, has already mandated individuals and businesses to link their Tax Identification Number (TIN) to bank accounts used for business transactions or income, including salaries, stressing that since then, some taxpayers have complied, though awareness has remained below average.

He said the committee only reviewed this provision and incorporated it into the new tax laws to strengthen enforcement.

In his words, “because the level of tax awareness in Nigeria is so poor, people are finding out so many things for the first time. They assume the new tax law is introducing these measures. This one is actually not.”

According to him, while existing laws already require banks to file customer information with tax authorities, the new legislation introduces a mandatory disclosure threshold of N25 million per quarter for individuals and N100 million for companies.

He emphasised that the reforms do not give any authority—whether the Federal Inland Revenue Service (FIRS), the Central Bank of Nigeria (CBN), banks, or other government agencies the power to directly deduct money from personal or corporate bank accounts. “Even if you have N1 billion in the account, nobody can debit your bank account,” he said, emphasizing that tax recovery follows a lengthy legal process involving assessments, correspondence, and ultimately the courts.

Inferring from three decades of experience, Oyedele said he had never seen the extreme enforcement powers in the law applied in Nigeria, noting that what exists is a legal mechanism known as “power of substitution,” similar to a garnishee order in other jurisdictions, which can only be invoked after a court has ruled on a tax dispute and the taxpayer has refused to comply.

In such rare cases, he said, the court may order a bank to pay the government from a taxpayer’s funds after all legal remedies have been exhausted. “That’s the extreme case,” Oyedele said, adding that it is unlikely to apply to most Nigerians. “Nobody is taking any amount from their bank account. Whether it has N50,000 or N50 million, nobody is taking anything.”

It would be recalled that Nigeria’s new tax reform laws were officially gazetted on September 9, with full implementation scheduled to commence on January 1, 2026.