Starting from January 2026, all financial institutions operating in Nigeria will be mandated to report customer accounts with monthly transactions of ₦5 million and above to the Federal Inland Revenue Service (FIRS), as part of the Federal Government’s effort to enhance transparency and widen the tax net.
This directive, which comes under the evolving tax compliance framework being spearheaded by the FIRS, is targeted at improving revenue generation by identifying individuals and businesses whose financial activities significantly exceed what is declared in their tax filings. According to officials familiar with the policy, the move aligns with global standards of automatic exchange of financial information between tax authorities and financial institutions.
The FIRS, in collaboration with the Central Bank of Nigeria (CBN), will work closely with Deposit Money Banks (DMBs) to ensure smooth implementation of the policy, which forms part of the broader tax reform agenda under the administration of President Bola Ahmed Tinubu. The government has consistently emphasized its intention to strengthen non-oil revenue sources amid declining oil receipts and growing fiscal pressures.
Under the new system, banks will be expected to flag accounts—whether corporate or individual—that record inflows or outflows of ₦5 million or more within a calendar month. These reports are to be submitted to the FIRS in line with the stipulations of the Finance Act and relevant provisions of the Personal Income Tax Act (PITA) and Companies Income Tax Act (CITA). The information will be used to cross-check against tax declarations and identify discrepancies or cases of suspected evasion.
Sources within regulatory circles told KIIN360 that the policy is not aimed at penalizing high-volume account holders, but rather ensuring that all economically active individuals and entities contribute their fair share to national development. The reporting threshold, they say, was set deliberately to focus on potentially under-taxed segments of the population, without overwhelming banks or unduly targeting small earners.
The FIRS has assured Nigerians that the data collected will be handled with utmost confidentiality and used strictly for tax assessment and enforcement purposes. According to the Service, the process complies with international data protection laws and is in line with Nigeria’s obligations under treaties such as the OECD’s Common Reporting Standard (CRS), to which Nigeria is a signatory.
This move is coming at a time when Nigeria is intensifying its domestic revenue mobilization drive, especially through digitization and inter-agency collaboration. In recent months, the FIRS has ramped up efforts to modernize its operations, improve taxpayer services, and deploy data analytics to detect unreported income.
With this upcoming reporting regime, experts believe the government may be able to plug revenue leakages and hold more Nigerians accountable to the tax system, which currently suffers from a low compliance rate. As of 2024, less than 20 million Nigerians were registered as taxpayers, out of a population exceeding 200 million, according to official statistics.
The new policy has sparked conversations among stakeholders in the banking and business community, with some praising the initiative as a necessary step toward fiscal discipline, while others have raised concerns over potential misuse or lack of clarity in implementation guidelines. The FIRS has promised to release more detailed operational guidelines before the policy takes effect on January 1, 2026.
Until then, financial institutions are expected to update their internal systems and customer communication processes, while taxpayers are encouraged to ensure that their records are in compliance with existing laws, to avoid penalties or regulatory scrutiny.