NEWS
Federal Government Clarifies TIN Requirement for Personal Bank Accounts, Unveils Wide-Ranging Tax, Capital Market, and Economic Reforms Ahead of 2026 Implementation
The Federal Government has provided crucial clarity on the ongoing tax reforms, declaring that Tax Identification Numbers (TINs) are not required for strictly personal bank accounts, except when such accounts are used for business transactions. The clarification was issued by the Presidential Committee on Fiscal Policy and Tax Reforms, led by Chairman Taiwo Oyedele, who outlined key provisions of the reform agenda during a strategic engagement with the management of LEADERSHIP Newspaper in Abuja over the weekend.
According to Oyedele, the reform is designed to enhance fairness and transparency in Nigeria’s tax system, ensuring that only individuals using their personal bank accounts for commercial purposes are mandated to obtain a TIN.
He emphasized that tax authorities now rely on Bank Verification Number (BVN) data to detect income patterns consistent with business activity, eliminating the possibility of evading tax obligations by using personal or family members’ bank accounts.
“You need a tax ID for your bank account if that bank account is used for business transactions. If you are not using your account for business, you don’t need to attach your tax ID. If you don’t get your tax ID, the authorities will know.”
Oyedele explained that the provision derives from the 2020 Finance Act, effective since January 13, 2020, but has now gained enhanced enforcement capacity through advanced digital intelligence that easily identifies business-like inflows and outflows.
He noted that when an account shows patterns such as random payments from numerous customers and payments to suppliers, it is automatically flagged as a business account, prompting enforcement measures which, he warned, may be “unfriendly” for non-compliant account holders.
“So, different random people will be paying into the account. You would also be paying different random people, maybe your suppliers. When the system detects that pattern, the authorities will know that this is a business account, and the tax man will come to you and it will not be friendly at that point, because it means you yourself have not been honest.”
He disclosed that several banks have already begun implementing this new compliance model.
Oyedele stressed that the measure aims to curb widespread tax evasion by individuals who divert business income into personal accounts, thereby disrupting the progressivity of the system which exempts low-income earners, particularly those earning up to ₦100,000 monthly from January 2026, while ensuring high-income earners pay their fair share.
“If we agree that poor people should not pay, let them not pay… Don’t allow rich people to hide, because the system will collapse,” he stated.
He lamented the significant misinformation spreading across the country regarding the new tax system.
“If you go on the street now and ask any young person, they will tell you there’s a 30 per cent tax in the capital market, because that’s what they’ve been told,” he added.
The tax reform agenda includes landmark exemptions aimed at reviving the Nigerian capital market and attracting both local and foreign investors.
Key features include:
1. Exemption from capital gains tax for portfolios and share sales totaling ₦150 million or less annually, covering about 99% of investors.
2. Tax-free reinvestments for foreign investors.
3. Abolition of withholding tax on bonus shares.
4. Removal of stamp duties on share transfers.
These interventions have already begun yielding results, with foreign portfolio investments rising to ₦2.1 trillion as of October 2025.
Oyedele noted that foreign investors who left around 2022 have made a strong comeback due to renewed confidence.
Despite this surge, he expressed concern over the low participation of young Nigerians in the capital market. While the average age of investors is 45, he said younger citizens are holding nearly $60 billion in cryptocurrencies and stablecoins, exposing themselves to volatility instead of leveraging safer, higher-return opportunities in the equities market.
“Young people, leave crypto. This is where to make more money. It is tax-exempt and the returns are better. If you can even clean just $20 billion of that virtual currency into the capital market, it will change our story.”
Oyedele painted a grim picture of the economic situation President Bola Tinubu inherited in May 2023, describing the nation as “teetering on collapse.”
He recounted:
– Foreign reserves had dropped below $4 billion.
- The government owed over $7 billion in FX forward contracts.
- International cards could not process $20 subscriptions.
– Airlines, including Emirates, halted operations due to trapped funds.
- Oil theft had crippled onshore and shallow-water output by 80%, pushing production below 1 million barrels per day.
– Fuel subsidy liabilities wiped out NNPC’s revenue streams.
– Government revenue was under 10% of GDP, while 7% was consumed by debt servicing.
– The Central Bank printed ₦22.7 trillion, plus ₦7 trillion in interest, fueling inflation.
However, he said reforms, including FX market unification, subsidy removal, and comprehensive tax restructuring reversed the trajectory.
Achievements include:
1. Over $7 billion in trade surpluses.
2. CBN becoming a net forex buyer for 10 consecutive months.
3. Restoration of international spending limits to $6,000.
4. Oil production rebounding to 1.7 million bpd (including condensates), with theft reduced to 5%.
The new tax reforms, set for full implementation on January 1, 2026, introduce sweeping progressivity:
1. Individuals earning ₦100,000 monthly and below will pay zero PAYE.
2. Earners between ₦100,000 and ₦1.8 million monthly will see reduced rates.
3. Only high-income earners will experience slight increases.
He added that the reform fully zero-rates essential items: food, rent, transport, health, and education, meaning manufacturers receive 100% VAT refunds on input costs.
“From January, this bottle of water becomes zero-rated… any VAT that you have incurred yourself to produce the water will be refunded, 100 per cent refund.”
Businesses will also enjoy a 25% reduction in Company Income Tax (CIT) and expanded VAT input credit to services, including airtime, vehicles, and equipment.
“As LEADERSHIP, you have vehicles… your camera… even when you buy airtime on your phone now, from January next year, you can claim it back, because you use your phone for your business.”
He advised firms to strengthen their accounting processes:
“From January, you need to keep a proper record, because nobody gives you VAT credit because you said, ‘give me ID’. You have to provide documentation… So your finance people should be very, very busy now.”
Other reliefs include:
- Cash-basis VAT and withholding tax remittance.
– Exemptions for unpaid bad debts.
– 30-day VAT refunds.
– Strict penalties (up to 200%) for fraudulent claims.
– Abolition of minimum tax for unprofitable businesses.
-Consolidation of taxes into harmonised single-digit levies.