In a significant step toward enhancing financial transparency and increasing tax compliance, the Federal Inland Revenue Service (FIRS) has introduced a new regulation requiring banks to report monthly transactions exceeding ₦5 million for individuals and ₦10 million for corporate accounts.
What the New Law Means
Effective immediately, all Nigerian banks are mandated to submit monthly returns to the FIRS detailing:
- Individual account transactions that total ₦5 million or more
- Corporate account transactions that total ₦10 million or more
These reports will include key transaction details but do not authorize banks to deduct taxes directly. Instead, the data will be used by FIRS to identify possible tax evasion and ensure better compliance with existing tax laws.
Why This Matters
This new rule is part of the Nigerian government’s broader strategy to widen the tax net, monitor high-value financial activity, and curb illicit financial flows. Here’s how it could impact you:
- Individuals & SMEs: High-value transactions may trigger tax audits or compliance reviews.
- Corporate Entities: Companies need to ensure their financial records and tax filings are up to date and in order.
- Tax Advisors & Accountants: There will be increased demand for professional tax planning and compliance services.
What You Should Do
As a business or individual who makes high-volume transactions:
- Ensure your tax filings are accurate and up to date.
- Keep detailed records of your income sources and expenditures.
- Consult a qualified tax professional to review your compliance risk and plan ahead.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.
