The federal government has issued a directive requiring banks and other financial institutions to report monthly financial transactions exceeding N25 million for individuals and N100 million for corporate entities to the tax authorities.
This move is part of the new provisions under the Nigerian Tax Act, which mandates financial institutions to submit quarterly returns to the Federal Inland Revenue Service. The agency is set to be renamed the Nigeria Revenue Service starting January 2026 when the new tax regime takes full effect.
According to the Act, “Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose.”
It further states, “Without prejudice to section 142 of this Act, every bank, insurance company, stock broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25000000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100000000 or more.”
Before the enactment of the new tax law, financial institutions were required to report deposits of N5 million and above as part of existing measures to track and prevent illicit financial flows.
Experts have said the new thresholds are part of the government’s broader efforts to enhance anti money laundering compliance and strengthen oversight in the financial system. In 2023, Nigeria was placed on the grey list by the Financial Action Task Force due to deficiencies in its frameworks for combating money laundering and terrorism financing.
Since then, Nigeria has been working to meet international standards. In November 2024, Hafsat Bakari, chief executive officer of the Nigerian Financial Intelligence Unit, announced that the country had recorded progress in five key areas of recommendation from the Financial Action Task Force.
