Banks now to report N25m+ individual, N100m+ corporate transactions monthly

The Federal Government of Nigeria has introduced sweeping tax reforms mandating all banks and financial institutions to report monthly transactions exceeding N25 million for individuals and N100 million for corporate entities to the tax authorities, beginning January 2026.

The directive is embedded in the new Nigerian Tax Act, which also outlines a comprehensive restructuring of the country’s tax administration system.

A key feature of the reform is the renaming of the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS) to reflect its expanded oversight functions.

Under the new law, financial institutions—including commercial banks, insurance firms, stockbroking houses, and fintech platforms—must submit quarterly reports detailing high-value transactions and customer data to tax authorities. This is aimed at increasing transparency, curbing illicit financial flows, and enhancing revenue generation.

The new provisions, which override earlier guidelines that required banks to report individual deposits of N5 million, state that:

“Every bank, insurance company, stock-broking firm, or any other financial institution shall prepare, with or without demand by the relevant tax authority, quarterly returns specifying the names and addresses of new customers, as well as existing customers whose cumulative transactions in a month meet certain thresholds: N25 million or more for individuals; N100 million or more for corporate entities”

The Act further mandates monthly returns from all tax-deducting entities, affirming the government’s commitment to data-driven tax administration and real-time compliance monitoring.

Financial experts say the new reporting thresholds are part of a broader national effort to improve financial transparency and crack down on money laundering, tax evasion, and terrorism financing.

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Nigeria was placed on the grey list of the Financial Action Task Force (FATF) in 2023 for deficiencies in its anti-money laundering and counter-terrorism financing frameworks. Being on this list subjects a country to increased scrutiny and global financial monitoring.

In response, Nigerian authorities have accelerated reforms in compliance, surveillance, and enforcement. In November 2024, Hafsat Bakari, CEO of the Nigerian Financial Intelligence Unit (NFIU), announced that Nigeria had secured upgrades in five key FATF recommendations, a significant step towards exiting the grey list.

The Federal Government’s new tax compliance framework is expected to improve revenue mobilization, reduce capital flight, and promote accountability within Nigeria’s financial system.

Tax authorities say the measure will help bridge the gap between actual earnings and declared income, particularly among high-net-worth individuals and corporate entities that have historically exploited loopholes in the financial reporting system.

Critics, however, warn that without proper safeguards and data privacy protections, the policy may result in overreach or misuse of sensitive financial information.

Still, authorities maintain that the reforms are necessary for Nigeria to meet its domestic revenue targets, exit the FATF grey list, and build a more robust and secure financial ecosystem.

As January 2026 approaches, financial institutions have been advised to update their compliance protocols and engage with the NRS to ensure a smooth transition into the new reporting regime.