By Blaise Udunze
It is not only questionable but an aberration that a nation where over 38 million Nigerians remain financially excluded, where trust in institutions is fragile, and where citizens are pressured under the weight of high cost of living, the use of Tax Identification Number, TIN, has been specified as the only option for their bank accounts operation from January 1, 2026 by the Federal Government of Nigeria.
In practice, the policy spearheaded by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, is rooted in the Nigerian Tax Administration Act, NTAA, and the intention can be understood in the areas of improving tax compliance, widening the tax net, and formalizing economic activities. But in practice, the directive risks becoming yet another well-meaning reform that punishes the wrong people, disrupts financial inclusiveness, and potentially destabilises an already stressed economy.
Yes, Nigeria needs tax reforms. Yes, the country must broaden its tax base. And yes, public revenues must increase to address fiscal pressures But compelling citizens to obtain TINs as a condition for operating bank accounts is the wrong tool for the right objective.
Below are five core arguments against the directive, and sustainable alternatives that actually strengthen tax compliance without endangering banking access or punishing informal earners.
At present, Nigeria still struggles with financial inclusion. According to several official assessments, over 38 million adults remain outside the formal financial system. Many of them operate small, irregular businesses, survive through subsistence earnings, or depend on cash-based livelihoods.
The Federal Government’s compulsory TIN-for-bank-accounts policy is built on the assumption that every banked Nigerian is structured, organised, and tax-ready. This is false.
For instance, the rural market woman with N30,000 in rotating savings, the okada rider who deposits cash once a week, the petty trader using a mobile POS agent account, the retiring pensioner managing a small monthly income, and the migrant worker sends small remittances to their family. These are not tax evaders; they are survivalists.
Most operate bank accounts not because they run formal businesses, but because those accounts are essential to modern financial life: receiving transfers, accessing loans, participating in digital commerce, saving against emergencies, and avoiding the risks of moving cash in insecure environments.
By creating an additional bureaucratic barrier, the directive risks pushing millions back into a cash-dominant shadow economy, precisely the opposite outcome of what Nigeria’s financial-sector reforms are trying to achieve.
The NTAA, leadership were said to have clarified that the TIN requirement applies only to taxable persons, individuals engaged in trade, employment, or income-generating activities .But herein lies the problem: banks cannot determine who is “taxable” and who is not. Banks only see deposits and withdrawals. They do not audit the source or consistency of income. They are not tax authorities.
A student may run a small online clothing resale gig. A retiree may occasionally rent out farmland.A dependent may receive cash support from a relative abroad. A job seeker may get intermittent gifts from family.
Who decides which of these scenarios qualifies as taxable? Banks? FIRS? Or will citizens be expected to self-declare under threat of account restrictions?The result will be confusion, over-compliance, and mass panic with banks indiscriminately demanding TINs from everyone to avoid regulatory penalties. This not only contradicts the spirit of the law but also exposes ordinary Nigerians to harassment and arbitrary compliance requirements.
Whenever Nigerians perceive threats to their access to funds, the natural reaction is withdrawal and hoarding. We saw it during:the 2023 Naira redesign crisis, and the 2016 TSA-bank consolidation tightening, and multiple periods of financial instability.Telling citizens that bank accounts may face “operational restrictions” if they do not obtain a TIN creates a predictable behavioral response: people will rush to withdraw money.
This would be disastrous for a banking system already pressured by: high interest rates, inflation eroding deposits, rising loan defaults, and declining public trust.Any government policy that unintentionally creates an incentive for citizens to flee the formal banking system is counterproductive.
Many believes that the TIN, requirement will become a bureaucratic nightmare in the short run. This is because even if millions of Nigerians want to comply with the Bola Ahmed Tinubu’s Administration Tax policy, the system is not ready for now.
Financial analysts contends that Nigeria’s administrative infrastructure does not have the capacity to process tens of millions of TIN registrations within months without long queues, delays, data mismatches, duplicate records, and systemic errors.
The National Identity Number, NIN, SIM registration experience is a painful reminder of happens when ambitious policy meets weak execution capacity. Citizens spent months in overcrowded enrolment centres. Millions were blocked from services. Data inconsistencies persisted. The economy suffered productivity losseIf Nigeria could not seamlessly synchronize NIN and SIM data, how will it synchronize NIN, BVN, and TIN at a national scale without dislocation?
There is no gainsaying the fact that forcing the TIN adoption ignores the real problem of Nigeria’s broken tax culture. Indeed, the Federal Government’s real challenge is not that citizens inability to obtain the TINs, but that lack trust in how taxes are used.
A government cannot widen the tax net when: tax leakages remain widespread, citizens feel services do not match taxation, corruption perceptions are high, government spending lacks transparency, and taxpayers do not feel seen, heard, or valued.
Coercion does not build a tax culture. Engagement does. Policy does not create legitimacy. Accountability does.If the Federal Government wants Nigerians to freely participate in the tax system, it must earn legitimacy first, not mandate compliance through financial restrictions.
The suggestions in several quarters were that the government should initiate smarter tax reforms Instead of enforcing a policy that may backfire economically and socially, the Federal Government can adopt four smarter, people-centred- alternative.
They were said to have argued vehemently that automatic TIN Issuance linked to NIN and VIN, should be adopted rather than forcing Nigerians to apply manually.
They would want the government to auto-generate TINs for all existing BVN/NIN holders, send the TINs via SMS, email, and bank alerts, and allow self-activation only when needed for tax obligations, to eliminate queues, delays, and confusion.
Moreso, they would want the government to consider it as matter of necessity to build a voluntary compliance tax culture through transparency and incentives, insisting that morale improves when citizens see value.
This may have informed why they were said to have further suggested that the government should publish annual audited reports of tax revenue use, incentivise compliant taxpayers with benefits, priority access to government grants, credit scoring, etc., simplify tax filings for small businesses as people comply more when they feel respected, not coerced.
Also, the Nigerian government, should target high-value tax evaders and not low -income account holders as Nigeria’s real tax leakages come from large corporations shifting profits, politically exposed persons, illicit financial flows, multinational tax avoidance strategies and the informal “big money” class operating outside the banking system.
Instead threatening small depositors, the argument in both official and unofficial circles, was that the government should strengthen: FIRS intelligence and investigation units, inter-agency data integration, CAC, Customs, Immigration, beneficial ownership transparency enforcement.
The fight against tax evasion should focus on those hiding billions, not those depositing thousands.There is also the need to strengthen digital tax platforms for easy registration and compliance. The argument by many was that If tax registration becomes as easy as opening a social media account, ‘’compliance will rise naturally’’. The government should build a mobile-first tax app, simplified online TIN retrieval and one-click tax filing for gig workers and small traders, they insist, noting that digital convenience can achieve what regulatory coercion cannot.
Analysts had contended that the government tax reform should not be used to punish the public which are not the architect of Nigerian’s financial challenges but the executives.
Admitted that the tax reforms are needed urgently, but they must come with a human face, an intelligent, equitable, and aligned with the realities of ordinary Nigerians in mind.
The TIN-for-bank-accounts policy, while well-intentioned, risks undermining financial inclusion, triggering economic instability, and imposing unnecessary burdens on millions who are not tax evaders but survival-based earners.
Good tax policy is built on trust, not fear. On transparency, not threats. On civic legitimacy, not administrative compulsion.
If the Federal Government truly wants to modernise Nigeria’s tax system, it must focus not on restricting citizens’ access to their own money, but on repairing tax trust, digitizing compliance, targeting the real evaders, and making participation easier, not harder.
Financial inclusion took Nigeria decades to build. We cannot afford a policy that carelessly reverses these gains.A better tax system is possible, but it must start with the people, not with their bank accounts.
Udunze is a Lagos -based journalist and a PR Consultant, can be reached via: blaise.udunze@gmail.com
