Starting in 2026, all Nigerian banks will be required to report customer accounts with monthly transactions above ₦5 million to the Federal Inland Revenue Service (FIRS), as part of new tax reforms signed into law.
The update, announced by the National Orientation Agency (NOA) on its official X (formerly Twitter) handle, follows the passing of the 2025 Tax Reform Act, aimed at improving tax compliance and fighting financial irregularities.
According to Section 30 of the Act, commercial banks will now play a direct role in tracking high-value transactions and reporting them every month to tax authorities.
The government believes this will help identify untaxed income and increase revenue, especially from high-net-worth individuals and businesses operating in the informal sector.
In addition to the new bank reporting rules, the law also introduced several relief measures for ordinary Nigerians. People earning up to ₦800,000 annually (about ₦66,667 monthly) will no longer pay personal income tax. Previously, the tax-free limit was ₦500,000.
Other key provisions include:
– No capital gains tax on the sale of a primary home.
– Up to ₦10 million in compensation for injury, job loss, or defamation is now tax-free.
– A new VAT sharing formula from 2026:
– Federal Government: 10% (down from 15%)
– States: 55% (up from 50%)
– Local Governments: 35% (unchanged)
– State share divided by population (20%), equal share (50%), and consumption (30%)
This VAT model is expected to benefit high-consumption states like Lagos and Rivers, pushing states to grow their local economies and generate more internal revenue.
Experts have praised the reforms as a bold step to widen Nigeria’s tax base without overburdening low-income earners. However, some privacy advocates have raised concerns, urging the government to put proper safeguards in place to prevent misuse of banking data.
As 2026 approaches, both financial institutions and citizens will be watching how the reforms are implemented and what impact they will have on revenue collection and the wider economy.
