The Federal Government has directed banks and other financial institutions in Nigeria to begin reporting all monthly transactions that exceed ₦25 million for individuals and ₦100 million for corporate entities to the tax authorities.
The directive, contained in the newly amended provisions of the Nigerian Tax Act, mandates financial institutions to submit detailed quarterly returns to the Federal Inland Revenue Service (FIRS). The agency will, however, be rebranded as the Nigeria Revenue Service (NRS) beginning January 2026, when the new tax system comes into effect.
Quoting directly from the Act, it states:
“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 mandates that: “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 ₦25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to ₦100,000,000 or more.”
Prior to this change, banks were mandated to report deposits of ₦5 million or more, a threshold designed primarily to curb illicit financial flows. The newly revised limits significantly raise the bar and are expected to tighten compliance and oversight measures in the financial system.
Industry experts say the shift reflects the federal government’s determination to enhance the country’s anti-money laundering framework.
The move also comes against the backdrop of Nigeria’s listing on the grey list of the Financial Action Task Force (FATF) in 2023. The FATF placed Nigeria under increased monitoring following identified deficiencies in the fight against money laundering and terrorism financing.
Since then, the federal government has taken deliberate steps to strengthen financial oversight and regulatory compliance. In November 2024, Hafsat Bakari, the Chief Executive Officer of the Nigerian Financial Intelligence Unit (NFIU), confirmed that the country had recorded progress in addressing the FATF’s concerns.
“Nigeria has achieved upgrades in five key recommendations from the FATF,” Bakari said at the time, signaling improvements in the nation’s anti-money laundering architecture.
The latest reporting requirements are expected to bolster transparency, improve tax compliance and demonstrate Nigeria’s commitment to exiting the FATF grey list.
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