New Tax Rules: Banks, Insurers to Report Monthly Transactions Above ₦25m to Tax Authorities
— Individuals & firms now under closer watch; financial institutions to act as debt recovery agents
Effective January 2026, banks, insurance companies, stockbrokers, and other financial institutions will be mandated to report high-value transactions to the tax authorities as part of Nigeria’s evolving tax reforms. This directive is outlined in the Nigeria Tax Administration Act (NTAA) and forms part of the broader Nigeria Tax Act 2025.
Key Highlights of the New Directive:
Monthly Reporting Thresholds:
• Individuals: Any individual whose total monthly transactions hit ₦25 million or more will now be flagged in returns submitted by financial institutions.
• Corporate Entities: For companies, the threshold is higher — ₦100 million in monthly cumulative transactions.
This means banks and other financial institutions must prepare quarterly reports detailing:
• Names and addresses of new customers, and
• For existing customers:
• All individuals who meet the ₦25 million threshold in a month.
• All corporate clients with ₦100 million or more in cumulative monthly transactions.
⚖️ Third-Party Debt Recovery Powers
Under the same Act, financial institutions will now act as third-party tax debt recovery agents on behalf of the government, but only after all legal options have been exhausted by the tax authority.
According to the Act:
“The relevant tax authority may assign outstanding tax debts, in whole or in part, to an accredited third party… including banks, debt recovery firms, or any other person accredited by the Service.”
This provision also extends to:
• Debts owed to failed banks, where the courts will have exclusive jurisdiction to handle recovery cases.
• Significant tax debts, where certified third-party agents will be deployed to recover funds.
What This Means:
• Increased transparency and government oversight of large financial movements.
• Greater accountability for high-net-worth individuals and large corporate entities.
• Financial institutions now serve a dual role: service providers and tax data informants.
This move underscores the government’s commitment to improving tax compliance, broadening the tax net, and curbing tax evasion — especially among the financially active population.
— Individuals & firms now under closer watch; financial institutions to act as debt recovery agents
Effective January 2026, banks, insurance companies, stockbrokers, and other financial institutions will be mandated to report high-value transactions to the tax authorities as part of Nigeria’s evolving tax reforms. This directive is outlined in the Nigeria Tax Administration Act (NTAA) and forms part of the broader Nigeria Tax Act 2025.
Key Highlights of the New Directive:
Monthly Reporting Thresholds:
• Individuals: Any individual whose total monthly transactions hit ₦25 million or more will now be flagged in returns submitted by financial institutions.
• Corporate Entities: For companies, the threshold is higher — ₦100 million in monthly cumulative transactions.
This means banks and other financial institutions must prepare quarterly reports detailing:
• Names and addresses of new customers, and
• For existing customers:
• All individuals who meet the ₦25 million threshold in a month.
• All corporate clients with ₦100 million or more in cumulative monthly transactions.
⚖️ Third-Party Debt Recovery Powers
Under the same Act, financial institutions will now act as third-party tax debt recovery agents on behalf of the government, but only after all legal options have been exhausted by the tax authority.
According to the Act:
“The relevant tax authority may assign outstanding tax debts, in whole or in part, to an accredited third party… including banks, debt recovery firms, or any other person accredited by the Service.”
This provision also extends to:
• Debts owed to failed banks, where the courts will have exclusive jurisdiction to handle recovery cases.
• Significant tax debts, where certified third-party agents will be deployed to recover funds.
What This Means:
• Increased transparency and government oversight of large financial movements.
• Greater accountability for high-net-worth individuals and large corporate entities.
• Financial institutions now serve a dual role: service providers and tax data informants.
This move underscores the government’s commitment to improving tax compliance, broadening the tax net, and curbing tax evasion — especially among the financially active population.