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Beginning January 2026, banks, insurance companies, and other financial institutions in Nigeria will be required to report monthly financial transactions exceeding N25 million for individuals and N100 million for corporate entities to the Federal Inland Revenue Service (FIRS).
This new compliance mandate is outlined in Section 29 of the Nigeria Tax Administration Act (NTAA), under the provision titled “Information to be delivered by bankers and others.” The NTAA is one of several recently enacted tax laws, including the Nigeria Tax Act 2025, aimed at strengthening tax transparency and improving revenue administration.
According to the Act, financial institutions must, without waiting for a formal request, submit quarterly returns to the relevant tax authority. These reports must include the names and addresses of New customers and Existing customers whose monthly cumulative transactions meet or exceed:
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N25 million for individuals, or
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N100 million for corporate entities.
In addition to reporting obligations, the NTAA empowers financial institutions to act as third-party agents for tax debt recovery. Under this provision, tax authorities may delegate the collection of outstanding tax liabilities to accredited third parties—such as banks, debt recovery firms, or other licensed entities—once all legal recovery options have been exhausted.
The Act also grants courts exclusive jurisdiction over matters concerning the recovery of debts owed to failed banks, ensuring a streamlined legal process for such recoveries.
Furthermore, the law specifies that third-party recovery may be pursued only for debts deemed significant, and only after notifications, payment demands, and enforcement actions have been duly attempted.
These reforms are part of the Federal Government’s broader strategy to enhance financial accountability, plug revenue leakages, and ensure better compliance with tax regulations across the financial sector.
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