Nigerian Banks to report accounts with transactions of N5m to FIRS

Beginning January 1, 2026, all banks in Nigeria will be mandated to report customer accounts with monthly transactions totaling ₦5 million or more to the Federal Inland Revenue Service (FIRS) and other relevant tax agencies

The directive is part of the newly signed 2025 Tax Reform Act, aimed at improving tax compliance, boosting government revenue, and curbing illicit financial flows. According to the law, banks must submit regular reports on accounts that exceed the threshold in either inflows, outflows, or a combination of both within a single month.

This move is expected to help the government identify individuals and businesses that may be underreporting their income or evading taxes—particularly those operating in the informal sector or high-net-worth individuals.

Under the same Act, several other tax adjustments were introduced:

• The annual personal income tax exemption was increased from ₦500,000 to ₦800,000.
• Capital gains on a person’s primary residence are now exempt from taxation.
• Compensation of up to ₦10 million will no longer be subject to income tax.
• The VAT revenue-sharing formula between the federal, state, and local governments was also revised.

Tax authorities say the reporting requirement will improve transparency and align Nigeria with global best practices. However, some financial analysts have raised concerns about data privacy and the potential misuse of sensitive banking information, calling for clear guidelines to protect customer rights.

Customers with high transaction volumes are advised to ensure their tax records are in order before the new reporting regime takes effect in 2026.

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