Overview of the Nigeria Tax Administration Act 2025
As part of President Bola Tinubu’s Renewed Hope economic reform agenda, aimed at stimulating investment, driving inclusive growth, and sustainably diversifying government revenue, four landmark tax Acts were signed into law on June 26, 2025. These Acts form the legislative foundation of Nigeria’s most significant tax reform, designed to overhaul and modernize the country’s fiscal framework.
The key components of these reforms include:
- Nigeria Tax Act 2025: Consolidates and simplifies dozens of existing tax laws into a single statute.
- Nigeria Tax Administration Act 2025: Establishes uniform procedures for tax administration across federal, state, and local governments.
- Nigeria Revenue Service (Establishment) Act 2025: Provides the legal and operational framework for the new federal tax authority, the Nigeria Revenue Service.
- Joint Revenue Board (Establishment) Act 2025: Creates a board to harmonize tax administration among all tiers of government.
Collectively, these Acts have ushered Nigeria into a new fiscal regime, marking a critical step toward strengthening fiscal stability and broadening the nation’s revenue base.
Key Provisions of the Nigeria Tax Administration Act 2025
The Nigeria Tax Administration Act 2025 introduces uniform and efficient procedures for tax administration across all levels of government, aiming to improve compliance and transparency in the tax system. One of the central provisions is the requirement for every taxpayer to register with the relevant tax authority and obtain a unique taxpayer identification number (TIN).
This mandate covers all individuals, businesses, and even government ministries, departments, agencies, and local governments. Non-resident persons who earn income or supply taxable goods/services in Nigeria must also register for tax and obtain a TIN, unless they only receive passive investment income (in which case they are still required to provide certain information as prescribed by the service).
The tax authority will issue a TIN to each registered person, and having more than one TIN is prohibited—any duplicate registrations discovered are to be reported and unified. A TIN is not transferable or shareable. It serves as the official identity for every taxpayer in all tax-related matters. In other words, every taxpayer must use their TIN on all correspondence and documents submitted for tax purposes.
Additionally, the TIN must be quoted on all documents prepared, produced, and issued in respect of any transaction. Furthermore, it must be provided when entering into contracts with federal, state, or local government entities.
Financial Institutions and Tax Compliance
Banks, insurance companies, stockbrokers, and other financial institutions are now required to obtain customers’ TINs for certain transactions, reinforcing the link between financial activities and tax compliance. These measures are designed to improve record-keeping and make it easier for tax authorities to track taxable activities, thereby discouraging tax evasion.
Updating Taxpayer Information
The Act requires prompt notification of any changes in the taxpayer’s information. If a taxpayer’s particulars change—for example, a change of business name, address, ownership structure, or other relevant details—the taxpayer must inform the relevant tax authority within 30 days of the change.
This notification process ensures that the tax records remain up to date and that communications from the tax authority (such as notices of assessment or tax correspondence) reach the taxpayer at the correct address or contact. Failing to notify the authorities of such changes promptly can lead to penalties under the Act, emphasizing the importance of keeping one’s tax profile current.
Business Cessation and Tax Obligations
Provisions are also made for the cessation of business operations. If a taxpayer decides to temporarily suspend trading or business activities, they are required to notify the tax authority within 30 days of the temporary cessation. In such cases, the taxpayer’s TIN may be marked as dormant and suspended for the period of inactivity. This suspension status helps the tax authority distinguish between active and inactive taxpayers, preventing unnecessary compliance burdens during the break.
Once the business resumes, the taxpayer can reactivate the same TIN upon application, allowing them to continue operations under the original registration.
If a business permanently ceases operations (for instance, a company winding up or an individual closing a business indefinitely), the Act mandates that the taxpayer notify the tax authority of the permanent cessation within 30 days as well. Upon such notification and completion of any required final tax filings, the tax authority will deregister or cancel the TIN associated with the business. Before deregistration, the taxpayer is expected to settle any outstanding tax liabilities.
The Act provides a window (up to six months from the date of cessation) for final tax payments to be made in cases of permanent closure. By cancelling the TIN after a business shuts down, the law helps ensure that no new transactions can be carried out in the name of a defunct entity, and it provides closure to the taxpayer’s obligations—a critical step in preventing tax leakage and maintaining the integrity of the taxpayer register.
Handling Deceased Taxpayers
The Nigeria Tax Administration Act 2025 also addresses the treatment of deceased taxpayers. If an individual taxpayer passes away, responsibility for managing the tax matters of the deceased shifts to the person’s personal representatives (such as an executor or administrator of the estate). The personal representatives are required to handle the filing of any pending tax returns for the deceased and to pay any taxes owed from the estate.
The Act empowers the tax authority to work with executors in determining and collecting the final tax obligations of a deceased person. Once those obligations are settled or accounted for, the deceased individual’s TIN is cancelled by the tax authority. This cancellation prevents any misuse of the TIN after death and formally removes the deceased from the active taxpayer roll. Similarly, in the case of a company that is wound up or dissolved, the company’s TIN will be cancelled upon dissolution.
These measures ensure that tax obligations do not simply disappear upon death or dissolution—they must be properly concluded—while also updating the official records to reflect that the taxpayer is no longer active.
Conclusion
The first part of the Nigeria Tax Administration Act 2025 establishes the legal identity of every taxpayer and defines the life cycle of taxpayer obligations—from registration to cessation or death—thereby laying the foundation for modern, traceable, and enforceable tax compliance. In the next part of this series, we will examine the provisions of the Act as they relate to the filing of tax returns, assessment, and payment of taxes.
Dr Yassar Abubakar, the SA to the Executive Chairman of FIRS on Tax Matters, writes from Abuja.
