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The Nigeria Tax Administration Act (NTAA) 2025 introduces significant changes to the country’s tax landscape. Banks, insurance companies, and other financial institutions will be required to report monthly transactions exceeding N25 million for individuals and N100 million for corporate entities to the relevant tax authorities. This directive aims to enhance tax compliance and revenue generation.
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The NTAA also stipulates that banks and other financial institutions will act as third-party debt recovery agents for tax debts, but only after all legal avenues have been exhausted. The relevant tax authority may assign outstanding tax debts to accredited third parties, including banks and debt recovery practitioners.
Key Provisions of the NTAA
– Transaction Reporting: Financial institutions will submit quarterly returns to tax authorities, specifying new customers and existing customers with transactions above the set thresholds.
– Third-Party Debt Recovery: Banks and other financial institutions will act as third-party debt recovery agents for tax debts, but only after all legal avenues have been exhausted
– Tax Debt Assignment: The relevant tax authority may assign outstanding tax debts to accredited third parties, including banks and debt recovery practitioners.
The NTAA aims to modernise Nigeria’s tax system, making it more efficient, transparent, and equitable. By introducing new regulatory structures and digitalising tax records, the act seeks to promote greater accountability and compliance within Nigeria’s tax system.
The Act will come into effect on January 1, 2026, alongside other new tax laws, including the Nigeria Tax Act 2025. The Nigeria Revenue Service will play a crucial role in implementing and enforcing these new tax laws.
Dare Adekanmbi, FIRS spokesperson, noted that the law allowing accredited third parties to recover outstanding tax debts does not diminish the powers of the tax authority. “New as this is, it does not in any way suggest a weakening of the powers of the tax authority to collect revenue,” he said.
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Jonathan Nwokpor
