Nigerian Bank reports over 5 million monthly transactions

The new requirement outlined in Section 30 of the Tax Reform Act 2025 puts commercial banks at the forefront of major financial transparency. Banks will be required to monitor and report high-value transactions to the Federal Inland Revenue Service (FIR) and other relevant tax agencies every month. NOA announced an update through its official X (formerly Twitter) handling, saying the measure is part of a broader reform to ensure taxable income does not avoid regulatory oversight. Analysts say the move could significantly improve the government’s ability to track unreported revenues and increase revenues from informal and high net worth economic sectors.

In addition to the mandatory transaction report, the reform also introduces some regulations aimed at reducing taxpayers in low and middle income in Nigeria: annual income is as high as N800,000 (N666667) (N66667) (N66667) (N66667) (now N66667) (now) exemption from personal income tax, but the former personal income tax was N500,000 expenses. This change is designed to protect low-income earners and support the relief of cost of living. It further explained that Article 31 of the Act now exempts the capital gains from the sale of principal residences. In addition, under Article 50, compensation is up to 10 million, excluding taxable income due to injury, unemployment or defamation, providing wider financial protection to affected individuals.

The reform also introduced a new VAT distribution model, starting from 2026: Federal Government: 10% (down from 15%); State Government: 55% (up from 50%); Shared 50% of the sharing, based on population, at 20%, based on 30% of consumption; Local Government: 35% (unchanged) This transition rewards high consumption states, such as Lagos and Rivers, encouraging the governments of the subnational to develop their local economies by increasing the generation of internal income. Stakeholders believe that the combination of mandatory bank transaction reporting based on consumption and income redistribution marks a significant shift in Nigerian tax management philosophy.

It prioritizes transparency, equity and economic activities as the main drivers of national development. Financial experts praised the move as a bold step towards expanding the tax base without undue burden on low-income citizens. However, privacy advocates and financial institutions have called for clear guidelines to ensure data protection and prevent potential misuse of reporting systems. As implementation begins in 2026, stakeholders will be closely watching to measure the impact on compliance rates, government revenue and consumer behavior.