By Princess G. Adebajo-Fraser, MFR
Founder, The National Patriots
Introduction: A Turning Point for Nigeria
Beginning January 1, 2026, Nigerians will face a new reality: no bank account, no business operation, and no access to financial services without a Taxpayer Identification Number (Tax ID or TIN). This reform is anchored in the Nigeria Tax Administration Act, 2025, signed into law by President Bola Ahmed Tinubu in August. It is already being hailed as the most significant financial reform in decades.
The law makes tax compliance a precondition for participating in the financial system. While some citizens may initially view this as burdensome, the truth is that this policy represents a necessary, bold step toward building a sustainable national economy. For the first time, Nigeria is moving away from its dependency on oil revenues toward a citizen-driven taxation culture that is the backbone of prosperous nations.
Why This Law Matters
For decades, Nigeria has had one of the weakest tax compliance records in the world. Out of a population of more than 200 million, only about 10 million are registered taxpayers, while more than 60 million Nigerians operate bank accounts. This mismatch has crippled government revenue and left the nation overly dependent on oil earnings, which are volatile and shrinking in relevance in a climate-conscious global economy.
The numbers speak for themselves:
Nigeria’s tax-to-GDP ratio is a mere 10%.
Ghana stands at 13%, Kenya at 16%, South Africa at 27%, and the global average is 34%.
In practical terms, this means that while Nigeria has the largest economy in Africa, it collects far less in taxes compared to its peers, leaving public finances in a constant state of crisis. This explains why Nigeria’s budget deficits have widened, borrowing has increased, and infrastructure remains underfunded.
By mandating Tax IDs for all financial transactions, the Federal Government hopes to close this dangerous gap, expand the tax net, and secure revenue to fund critical services such as healthcare, education, and infrastructure.
What the Law Says
The Nigeria Tax Administration Act, 2025 introduces sweeping changes:
1. Individuals: No bank account can be opened or operated without a Tax ID.
2. Businesses: From small informal traders to multinationals, every enterprise must register.
3. Government Agencies (MDAs): Must obtain Tax IDs before entering contracts.
4. Foreign Suppliers: Cannot transact in Nigeria without registering with the new Nigeria Revenue Service (NRS).
5. Financial Institutions: Banks, insurers, and stockbrokers are barred from serving anyone without a Tax ID (Section 8(2)).
The Act also abolishes the Federal Inland Revenue Service (FIRS) and establishes the Nigeria Revenue Service (NRS) as the new tax authority. This institutional restructuring signals government’s determination to enforce compliance and build a modern, digitized tax regime.
Call for Support
“This reform is long overdue. For too long, Nigeria has depended almost entirely on oil revenues while big multinationals operating in our country — companies generating billions — have escaped proper taxation. The new Tax ID law means such companies must now give back fairly to the nation whose resources and infrastructure they benefit from.
Take for example our federal highways, many of which are damaged daily by heavy-duty trucks, including those of major corporations like Dangote. Proper tax contributions from these companies could fund the repair and maintenance of such roads, improve public services, and even cover the budgets of entire states. Multinationals like MTN, DSTV, and large banks, who are generating so much revenue quarterly, ought to pay the correct amount of tax to the government. Those revenues can fund free healthcare and education initiatives for the people, as seen in other countries.
The low-income earners need not fear — they will not be eligible to pay tax, but they will still need to register for transparency. The real target is wealthy corporations and high-net-worth individuals who must now fulfill their civic responsibility to the Nation.
This is how it works in advanced nations like the United Kingdom, where the government relies heavily on tax to provide free healthcare, education, and world-class infrastructure. Why should Nigeria be different?
President Bola Ahmed Tinubu’s administration has taken a bold step to strengthen accountability and reduce dependence on borrowing. As patriots, we must all support this move and demand transparency in its implementation so that Nigeria can finally build a taxation culture that delivers for her people.” – Princess G. Adebajo-Fraser MFR.
Lessons from Around the World
The argument for a strong taxation system is not theoretical; it is proven globally. Nations that thrive do so because they fund their budgets through taxes, not unsustainable borrowing or overreliance on natural resources.
United States: Tax revenues account for around 27% of GDP, funding Social Security, Medicare, infrastructure, and public services.
United Kingdom: About 33% of GDP is raised from taxes, paying for the National Health Service (NHS), free education, and public transport.
Scandinavian countries: In Norway, Denmark, and Sweden, tax-to-GDP ratios exceed 40%, allowing governments to deliver world-class healthcare, free universities, affordable housing, and generous social security.
The common denominator is simple: citizens pay taxes, and governments are held accountable to deliver welfare in return. Nigeria’s weak tax culture has prevented this social contract from taking root.
Implications for Nigerians
Bank Customers
From January 2026, no deposits, withdrawals, or transfers will be possible without a Tax ID. Citizens must register in advance to avoid disruption.
Small Businesses
Informal traders, who make up a huge part of Nigeria’s economy, will face new compliance obligations. However, proper registration may also grant them access to loans, credit, and formal recognition.
Corporate Nigeria
Large corporations will face stricter oversight to prevent tax evasion. Multinationals like MTN, DSTV, and major banks, whose revenues run into trillions of naira, will finally be compelled to pay their fair share.
Foreign Companies
Non-resident suppliers must register with the NRS before doing business in Nigeria, leveling the playing field for local companies.
Risks and Challenges
No reform comes without risks. Nigerians must be aware of the potential pitfalls:
1. Exclusion of the Poor: With 38 million adults unbanked, some may be excluded if the process is not inclusive.
2. Corruption and Bureaucracy: Without strong oversight, corrupt officials may exploit the registration process.
3. Awareness Gap: Millions risk missing the deadline if public education campaigns are not robust.
The success of this reform will depend on whether the NRS can build a transparent, efficient, digital-first system that minimizes human contact, speeds up processing, and ensures fairness.
Building a New Tax Culture
Nigeria must seize this moment to build a new taxation culture where:
Citizens understand tax as a civic duty, not punishment.
Government delivers value in return — better roads, schools, hospitals, and jobs.
Corporations are held accountable to contribute fairly to the economy.
This reform, if well-implemented, will reduce Nigeria’s reliance on borrowing, cut waste, and strengthen national sovereignty. It will also give citizens leverage to demand accountability, since the government will now be directly funded by the people.
What Nigerians Must Do
1. Register early: Do not wait until the last minute.
2. Gather required documents: NIN, BVN, ID, address, and business records (if applicable).
3. Stay informed: Follow NRS guidelines and updates.
4. Think beyond today: Taxes are an investment in collective welfare.
Conclusion: A Bold Step Toward Progress
The New Tax ID Law represents more than a bureaucratic change. It is a test of whether Nigeria can move beyond oil dependency into a sustainable, people-driven economy. It is also a chance to demand that the government fulfill its part of the social contract by delivering visible, measurable improvements in public welfare.
If successful, this reform will mark a turning point in Nigeria’s history — the birth of a true tax culture where every citizen and corporation contributes fairly, and the nation prospers as a result.
The National Patriots, emphasizes:
“This is a bold step and deserves the support of all Nigerians. It is time for every citizen, every company, and every leader to recognize that taxation is the foundation of national progress. With accountability, fairness, and transparency, this reform can deliver a better Nigeria for generations to come.”
𝐍𝐢𝐠𝐞𝐫𝐢𝐚’𝐬 𝐓𝐚𝐱 𝐑𝐞𝐟𝐨𝐫𝐦 𝐋𝐚𝐰𝐬 𝐇𝐚𝐯𝐞 𝐁𝐞𝐞𝐧 𝐏𝐮𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐢𝐧 𝐭𝐡𝐞 𝐎𝐟𝐟𝐢𝐜𝐢𝐚𝐥 𝐆𝐚𝐳𝐞𝐭𝐭𝐞
Enacted on 26 June 2025, the new tax laws are, the –
1. Nigeria Tax Act, 2025 (NTA)
2. Nigeria Tax Administration Act, 2025 (NTAA)
3. Nigeria Revenue Service (Establishment) Act, 2025 (NRSEA)
4. Joint Revenue Board (Establishment) Act, 2025 (JRBEA)
Key highlights include:
𝑯𝒊𝒈𝒉 𝒆𝒙𝒆𝒎𝒑𝒕𝒊𝒐𝒏 𝒕𝒉𝒓𝒆𝒔𝒉𝒐𝒍𝒅 𝒇𝒐𝒓 𝒔𝒎𝒂𝒍𝒍 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 – 0% tax for a small company, defined under the NTAA as having an annual turnover not exceeding N100m with a total fixed assets less than N250m.
𝑳𝒐𝒘𝒆𝒓 𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆 𝒕𝒂𝒙 𝒓𝒂𝒕𝒆 𝒇𝒐𝒓 𝒍𝒂𝒓𝒈𝒆 𝒄𝒐𝒎𝒑𝒂𝒏𝒊𝒆𝒔 – Provisions to enable the reduction of tax rate from 30% to 25% for large companies effective from a date as may be determined in an Order by the President on the advice of the National Economic Council.
𝑯𝒊𝒈𝒉 𝒕𝒉𝒓𝒆𝒔𝒉𝒐𝒍𝒅𝒔 𝒇𝒐𝒓 𝒕𝒐𝒑-𝒖𝒑 𝒕𝒂𝒙 – Exemption threshold of N50b revenue for local firms and €750m equivalents for multinationals.
𝑬𝒄𝒐𝒏𝒐𝒎𝒊𝒄 𝒅𝒆𝒗𝒆𝒍𝒐𝒑𝒎𝒆𝒏𝒕 𝒊𝒏𝒄𝒆𝒏𝒕𝒊𝒗𝒆 – Tax credit at the rate of 5% per annum for eligible priority sector investments.
𝑷𝒂𝒚𝒎𝒆𝒏𝒕 𝒐𝒇 𝒕𝒂𝒙𝒆𝒔 𝒊𝒏 𝑵𝒂𝒊𝒓𝒂 – Option to pay taxes on foreign currency transactions in Naira at the prevailing exchange rate in the official foreign exchange market.
𝑪𝒐𝒎𝒎𝒆𝒏𝒄𝒆𝒎𝒆𝒏𝒕 – The NTA and NTAA will commence on 1st January 2026 while the NRSEA and JRBEA have a commencement date of 26 June 2025 to ensure readiness of the relevant institutions ahead of full implementation in 2026.
Download copies of the laws here:
bit.ly/NewTaxReformActs
Princess Gloria Adebajo-Fraser MFR.
The National Patriots.
