TIN mandatory for business not personal accounts – Oyedele
Tax Identification Numbers are not necessary for personal bank accounts under Nigeria's latest tax reforms; they only become obligatory when the account is utilized for business activities, according to a clarification from the Presidential Committee on Fiscal Policy and Tax Reforms.
Taiwo Oyedele, the chairman of the tax reforms committee, shared this information and urged bank customers to perform a self-assessment, indicating that authorities will be able to identify such usage through patterns in Bank Verification Numbers.
During a meeting with the Leadership management in Abuja over the weekend, Oyedele stated that individuals who use personal bank accounts for business purposes are now required to acquire a TIN, noting that tax authorities can use BVN data to uncover evasion patterns, such as multiple unpredictable inflows from customers and outflows to suppliers.
“You must have a tax ID for your bank account if it is employed for business purposes. If you aren't using your account for business, then there is no need to provide your tax ID. If you fail to obtain your tax ID, the authorities will become aware.”
He explained that this requirement stems from the 2020 Finance Act, which took effect on January 13, 2020, and is further supported by new digital intelligence enabling authorities to identify business activity in unregistered personal accounts — including those belonging to spouses or children used to conceal income — ensuring that compliant taxpayers are not placed at a disadvantage.
Oyedele emphasized the importance of self-compliance: “You must have a tax ID for your bank account if it is used for business… If you are aware that you are using it for business, get a tax ID. If you do not get a tax ID, since we have your BVN, we can find out,” he cautioned, explaining that flagged accounts trigger unfavorable tax enforcement.
“So, various random individuals will be making payments into the account. Additionally, you might also be paying different random suppliers. If the system detects that kind of pattern, authorities will recognize that this is a business account, leading the tax authorities to come to you — and it will not be a friendly encounter at that point, as it indicates that you have not been transparent.”
He mentioned that some banks are already actively enforcing this requirement. He detailed that this measure aims to address evasion where individuals deposit business revenue into personal accounts to evade taxes, jeopardizing the progressivity that exempts low earners (up to N100,000 monthly from Pay As You Earn starting January 2026) while fairly targeting those with higher incomes.
“If we consent that low-income individuals should be exempt, let them remain so… Do not permit affluent individuals to conceal their income, as it will lead to a breakdown of the system,” he stated.
Oyedele expressed concern over the widespread misinformation concerning the new tax system, set to begin on January 1, 2026.
“If you out on the street right now and inquire from any young person, they will say there’s a 30 percent tax in the capital market, as that’s what they’ve been told,” he commented.
Oyedele outlined crucial reforms directed at the capital market intended to enhance participation and draw investments. These reforms exempt portfolios and sales under N150 million — which includes nearly 99 percent of investors — from capital gains tax, encouraging smaller and medium-sized investors to remain active in the market without facing tax burdens. He further clarified that if an investor’s portfolio or share sales in a year do not surpass N150 million, they are exempt from capital gains tax, thus offering significant relief to the majority of retail investors.
Moreover, reinvestments made by international investors are exempt from taxation, promoting a long-term investment mindset over short-term speculative trading. Shareholders now receive bonus shares without incurring withholding tax, and the elimination of stamp duties on share transfers has further lowered transaction costs and stimulated trading activity. He noted that these investor-centric changes have had a significant impact, with foreign portfolio investments in the Nigerian capital market reaching N2.1 trillion by October 2025.
Oyedele mentioned that foreign investors had previously withdrawn from the market around 2022 but have started to return in large numbers due to these favorable changes, indicating a rise in confidence. However, he pointed out that the typical age of investors is still 45, suggesting that younger Nigerians—who are predominantly invested in volatile cryptocurrencies and stablecoins amounting to approximately $60 billion—are not capitalizing on opportunities.
He encouraged young people to transition from cryptocurrencies to equities in the capital market, highlighting superior dollar returns of 50 percent and the current tax exemptions available. He described this shift towards the capital market as an essential route for financial advancement and wealth generation for younger Nigerians.
“Young people, abandon crypto. This is where you can earn more. It is tax-free and the returns are superior. If you could even transfer just $20 billion from that digital currency into the capital market, it would transform our narrative.”
Oyedele elaborated on how Nigeria faced a severe economic crisis in May 2023 when President Bola Tinubu took office, on the brink of collapse with foreign reserves below $4 billion, over $7 billion owed on foreign exchange forward contracts, and international cards unable to facilitate transactions of even $20. He noted that airlines like Emirates stopped flights due to repatriation challenges. Oil theft, he added, had drastically reduced onshore and shallow-water production by 80 percent, bringing output down to less than 1 million barrels daily, while NNPC subsidies depleted equity crude, royalties, petroleum profits, and future production as collateral, leaving only 00,000 barrels unencumbered and risking fuel shortages by late 2023.
He stated that government revenue accounted for less than 10 percent of GDP, with seven percent going towards servicing debt, leading to N22.7 trillion in money printing plus N7 trillion in interest—totaling N30 trillion—which fueled the inflation crisis.
He asserted that reforms such as the flotation of the foreign exchange rate, removal of PMS subsidies, and tax reforms reversed the negative trend, resulting in over $7 billion in trade surpluses, with the CBN becoming a net buyer of foreign exchange for ten months, reinstating card limits up to $6,000, and increasing oil production to 1.7 million barrels per day (including condensate) with theft reduced to five percent.
He also mentioned that the new tax legislation introduces a progressive structure, completely exempting earners up to N100,000 monthly from PAYE, lowering rates for those earning between N100,000 and N1.8 million (covering 98 percent of Nigerians), while only slightly increasing the tax for those with higher incomes—correcting the previous system where 96 percent of personal income tax was sourced from formal corporations.
Essentials including food, health, education, transport, and housing will become zero-rated, allowing for full VAT refunds on production costs to address cost-push inflation: “From January, this bottle of water will be zero-rated… any VAT incurred during its production will be refunded—100 percent refund.”
He indicated that businesses would benefit from a reduction in Company Income Tax (CIT) to 25 percent, with input VAT credits now applicable to services.
“As LEADERSHIP, you possess vehicles… your camera… even when you purchase airtime for your phone now, starting in January, you can claim it back, as you use your phone for business purposes.”
Oyedele advised: “Beginning in January, it’s crucial to maintain accurate records, as nobody will grant you VAT credits just because you request it. You must present documentation… Therefore, your finance teams should be very diligent now.”
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