Banks To Report Transactions Above ₦5 Million Monthly Under New Tax Law Starting 2026

The Nigerian government has mandated banks to report all customer accounts with monthly transactions exceeding ₦5 million to the Federal Inland Revenue Service (FIRS) and other tax authorities, effective January 2026. This directive is part of the 2025 Tax Reform Act aimed at strengthening tax compliance and promoting financial transparency.

Under Section 30 of the Act, commercial banks must monitor and submit monthly reports of high-value transactions to relevant tax bodies.

The National Orientation Agency (NOA) announced the measure on its official social media, highlighting its role in ensuring taxable income is properly accounted for, especially from informal and high-net-worth sectors.

The reform also introduces taxpayer-friendly provisions, including:Raising the personal income tax exemption threshold to ₦800,000 annually (₦66,667 monthly), up from ₦500,000, to ease the burden on low-income earners.

Exempting capital gains from the sale of a primary residence under Section 31.Excluding compensation up to ₦10 million for injury, job loss, or defamation from taxable income under Section 50.

Additionally, the Value-Added Tax (VAT) revenue distribution model will change from 2026: the federal government’s share reduces to 10% (from 15%), state governments’ share increases to 55% (from 50%), and local governments retain 35%.

Analysts believe these reforms will enhance the government’s ability to track unreported income and boost revenue generation across various economic segments.