Nigerian banks have been directed to report all customer accounts with monthly transactions exceeding ₦5 million to the Federal Inland Revenue Service (FIRS), as part of a sweeping tax reform aimed at boosting transparency and enhancing revenue generation.

The directive is outlined in Section 30 of the newly signed 2025 Tax Reform Act and was announced by the National Orientation Agency (NOA) via its official X (formerly Twitter) handle.

The move places commercial banks at the center of a nationwide effort to curb financial irregularities and improve tax compliance.

According to the NOA, the measure is one of several reforms designed to ensure taxable income does not escape regulatory oversight, aligning Nigeria’s fiscal structure with international standards.

Economic analysts say the mandatory reporting of high-value transactions could significantly strengthen the government’s ability to detect unreported income, particularly within the informal sector and among high-net-worth individuals.

In addition to the transaction monitoring directive, the 2025 Tax Reform Act introduces several provisions to ease the tax burden on low- and middle-income Nigerians: Personal Income Tax Exemption Raised: Individuals earning up to ₦800,000 annually (₦66,667 monthly) are now exempt from personal income tax, up from the previous threshold of ₦500,000.

Capital Gains Tax Relief: Section 31 of the Act exempts capital gains on the sale of a primary residence.

Compensation Tax Exemption: Section 50 stipulates that compensations up to ₦10 million for injury, job loss, or defamation are excluded from taxable income.

The Act also introduces a revised Value-Added Tax (VAT) sharing formula set to take effect in 2026: Federal Government: 10% (down from 15%), State Governments: 55% (up from 50%). Also 50% shared equally, 20% based on population, and 30% based on other metrics.

The NOA noted that the reforms are part of broader efforts to modernize Nigeria’s tax framework and ensure a fairer distribution of the nation’s fiscal responsibilities.