The federal government has instructed banks and financial institutions to start reporting monthly transactions that exceed N25 million for individuals and N100 million for companies to the tax authorities.
The updated provisions of the Nigerian Tax Act, provide that financial institutions must submit quarterly reports to the Federal Inland Revenue Service (FIRS).
Starting in January 2026, the agency will be renamed the Nigeria Revenue Service (NRS) when the new tax system is implemented.
The Act states that “every individual or entity required to deduct and remit tax under this Act or any other tax legislation must submit monthly reports to the relevant tax authority, as specified in the regulations issued for that purpose.
“Without affecting Section 142 of this Act, every bank, insurance company, stock brokerage, or any other financial institution must prepare quarterly reports for the relevant tax authority, detailing the names and addresses of new customers.
“And for existing customers, in the case of individuals, all transactions where the total for the month reaches N25,000,000 or more, or corporate entities, all transactions where the total for the month reaches N100,000,000 or more.”
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Before this new tax law, banks were required to report deposits of N5 million, a measure aimed at reducing illicit financial activities.
Experts indicate that this change is part of broader efforts to enhance anti-money laundering reporting within the financial sector.
In 2023, Nigeria was placed on the grey list by the Financial Action Task Force (FATF) due to shortcomings in addressing money laundering and terrorism financing.
Since then, the country has been striving to remove itself from the grey list, which subjects it to heightened scrutiny by the FATF.
In November 2024, Hafsat Bakari, the CEO of the Nigerian Financial Intelligence Unit (NFIU), announced that Nigeria has made progress in five key recommendations from the FATF.