Federal Government Mandates Monthly Transaction Reporting for Banks and Financial Institutions
The Federal Government of Nigeria has introduced a new directive compelling banks and other financial institutions to report monthly financial transactions exceeding N25 million for individuals and N100 million for corporate entities to the Federal Inland Revenue Service (FIRS). The policy, aimed at enhancing tax compliance and curbing financial malpractices, was announced on Tuesday by the Minister of Finance, Wale Edun, during a press briefing in Abuja.
The directive, effective from September 1, 2025, requires all commercial banks, microfinance institutions, and other financial entities to submit detailed transaction reports to the FIRS by the 10th of each month. These reports must include account holder details, transaction dates, amounts, and the nature of the transactions for accounts surpassing the specified thresholds. The move is part of the government’s broader strategy to strengthen revenue generation and ensure transparency in financial dealings.
According to the FIRS, the policy will enable the tax authority to better track high-value transactions, detect potential tax evasion, and ensure that individuals and businesses comply with their tax obligations. “This directive will close loopholes in our tax system and promote accountability,” said FIRS Chairman, Zacch Adedeji. “It will also provide critical data to support economic planning and anti-corruption efforts.”
The announcement has sparked mixed reactions. Financial analysts commend the government’s focus on improving tax compliance but warn of potential privacy concerns and increased administrative burdens for banks. “While the policy could boost revenue, it may strain smaller financial institutions that lack the resources to comply efficiently,” said Chika Okoro, a Lagos-based economist.
The Nigerian Bankers Association has called for clarity on implementation guidelines, urging the government to provide robust digital infrastructure to streamline reporting processes. Meanwhile, some citizens have expressed concerns over data security, fearing that sensitive financial information could be mishandled.
The FIRS has assured stakeholders that stringent measures are in place to protect data confidentiality and that non-compliant institutions will face penalties, including fines and sanctions. The agency also plans to collaborate with the Central Bank of Nigeria to ensure seamless enforcement.
This directive follows recent efforts by the government to digitize tax collection and expand the tax net, as Nigeria seeks to reduce its dependence on oil revenue amid global economic uncertainties. Further details on compliance procedures are expected to be released by the FIRS in the coming weeks.
Comments
Post a Comment