TIN not required for strictly personal bank accounts – FG

Tax Identification Numbers (TINs) are not required for strictly personal bank accounts under Nigeria’s new tax reforms; they become mandatory only when the account is used for business transactions, the Presidential Committee on Fiscal Policy and Tax Reforms has clarified.

Chairman of the tax reforms committee, Taiwo Oyedele, who made this known, advised bank customers to conduct a self-assessment, noting that authorities will be able to detect such use through Bank Verification Number (BVN) patterns.

Speaking during a session with the management of LEADERSHIP Newspaper in Abuja at the weekend, Oyedele said that individuals using personal bank accounts for business transactions must now obtain a TIN, adding that tax authorities leveraging BVN data can detect evasion patterns such as multiple random inflows from customers and outflows to suppliers.

“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.”

According to him, this requirement is rooted in the 2020 Finance Act, effective from 13 January 2020, and has gained traction through new digital intelligence that allows authorities to identify business activity in unregistered personal accounts — including those of spouses or children used to hide income — ensuring compliant taxpayers are not disadvantaged.

Oyedele stressed self-compliance: “You need a tax ID for your bank account if that bank account is used for business… If you know that you are using it for business, get a tax ID. If you don’t get a tax ID, because we have your BVN, we can find out,” he warned, adding that flagged accounts trigger unfriendly tax enforcement.

“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 noted that some banks already enforce this proactively.

The measure, he explained, will combat evasion where individuals funnel business revenue into personal accounts to dodge taxes, undermining progressivity that exempts low earners (up to N100,000 monthly from Pay As You Earn (PAYE) starting January 2026) while targeting higher incomes fairly.

“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 said.

Oyedele lamented the high level of misinformation surrounding the new tax regime, scheduled to take effect from 1 January 2026.

“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 said.

He highlighted significant reforms targeting the capital market aimed at boosting participation and attracting investments. These reforms exempt portfolios and sales under N150 million — which covers about 99 per cent of investors — from capital gains tax, encouraging small and medium investors to stay engaged in the market without tax burdens.

He further explained that if an investor’s portfolio or share sales in a year do not exceed N150 million, they are exempt from capital gains tax, thus providing relief to the vast majority of retail investors. Additionally, reinvestments made by foreign investors are also exempt, fostering a culture of long-term investment rather than short-term speculative trading.

Bonus shares received by shareholders no longer attract withholding tax, while stamp duties on share transfers have been removed, further reducing transaction costs and encouraging trading activity.

He said these investor-friendly reforms have yielded tangible results, with foreign portfolio inflows into the Nigerian capital market reaching N2.1 trillion as of October 2025.

Oyedele noted that foreign investors had previously exited the market around 2022 but have begun to return in significant numbers due to these positive changes, reflecting growing confidence. Despite these gains, he observed that the average age of investors remains 45, implying that younger Nigerians — who are currently heavily invested in volatile cryptocurrencies and stablecoins totalling about $60 billion — are missing out.

Oyedele urged youths to shift from crypto to equities in the capital market, citing superior 50 per cent dollar returns and tax exemptions now available.

He described this capital market shift as a crucial pathway for financial growth and wealth creation for younger Nigerians.

“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 detailed how Nigeria inherited a dire economic situation in May 2023 upon President Bola Tinubu’s inauguration, teetering on collapse with foreign reserves below $4 billion, over $7 billion owed on FX forward contracts, international cards unable to process even $20 subscriptions, and airlines such as Emirates halting flights due to repatriation issues.

Oil theft, he stated, had decimated onshore and shallow-water production by 80 per cent, dropping output below 1 million barrels per day, while NNPC subsidies exhausted equity crude, royalties, petroleum profits, and future production as collateral, leaving just 100,000 barrels unencumbered and risking fuel shortages by late 2023.

He said government revenue was under 10 per cent of GDP, with 70 per cent consumed by debt servicing, forcing N22.7 trillion in money printing plus N7 trillion interest — totalling N30 trillion — which ignited the inflation crisis.

According to him, reforms including FX flotation, PMS subsidy removal, and tax overhauls reversed the trajectory, achieving over $7 billion in trade surpluses, with the CBN becoming a net forex buyer for 10 months, restoring card limits up to $6,000, and increasing oil production to 1.7 million barrels per day (including condensate) with theft reduced to 5 per cent.

He further stated that the new tax laws introduce progressivity, exempting earners up to N100,000 monthly from PAYE entirely, reducing it for the N100,000–N1.8 million brackets (covering 98 per cent of Nigerians), with marginal increases only for higher incomes — addressing the pre-reform skew where 96 per cent of personal income tax came from formal corporates.

Essentials such as food, health, education, transport, and rent will become zero-rated, allowing full VAT refunds on production costs to combat cost-push inflation:

“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.”

He said businesses will gain from a 25 per cent Company Income Tax (CIT) reduction, with input VAT credits now extended to services.

“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.”

Oyedele advised: “From January, you need to keep proper records, 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.”

He listed additional reliefs to include cash-basis VAT/withholding tax remittance (bad debts exempt until paid), 30-day refunds after netting input against output (with 200 per cent penalties for false claims), no minimum tax unless profitable, and harmonised single-digit taxes and levies.