Tax ID: Banks, fintechs mandated to generate Tax IDs for account holders

Nigerian banks and fintech companies have been quietly mandated to automatically generate and update tax IDs for their customers, a move that will affect millions of account holders across the country without requiring any action on their part.

An insider with direct knowledge of the Federal Inland Revenue Service (FIRS) integration revealed that the tax authority has created API services specifically for financial institutions, enabling them to retrieve tax IDs in bulk using the National Identification Numbers (NIN) already stored in customer databases.

“A bank has 20 million people. They cannot be waiting for all 20 million to go and get their tax IDs. It’s better you just do it as a bulk service,” the source explained. “So the banks, as long as they have NIN, they don’t need to be telling customers to go get it, because they will just use it to retrieve it.”

While this development is separate from the earlier clarification that NINs are not tax IDs but rather tools to generate them, it represents the practical implementation of how Nigeria’s new unified tax system will roll out at scale.

How the automatic generation works

Here’s a practical demonstration of what this means for the average Nigerian. Imagine you opened your bank account years ago and provided your NIN as part of the Know Your Customer requirements. That same NIN is now sitting in your bank’s database.

Under the new FIRS mandate, your bank will access the tax authority’s API, send your NIN along with basic verification details, and receive your unique tax ID in return. This tax ID will then be automatically added to your account profile without you visiting a branch, filling forms, or making any requests.

“FIRS has made provisions for the banks to update tax IDs and tender account numbers at the back end, making it stress free for people, businesses, and individuals,” the insider confirmed.

For fintech companies like Opay, Palmpay, Kuda, and others with millions of users, the same process applies. If they have your NIN on file, they can retrieve and store your tax ID automatically.

Why banks/fintechs are asking for tax information

This explains the recent wave of notifications from Nigerian banks requesting customers to update their tax information. Banks like Fidelity have sent official statements asking customers to add their tax IDs to their profiles.

What many customers did not realise is that banks already have the capability to do this themselves. The notifications may simply be banks ensuring compliance and giving customers the option to verify the information before it is automatically populated.

“It’s not like the bank needs customers to do anything. FIRS has created that capability. It’s not left for the bank to utilise it,” the source noted.

What this means for everyday Nigerians

For the typical bank customer, this development means you will soon see a tax ID field populated in your banking app or profile, even if you never personally retrieved one from the FIRS website. This is not a new registration or an additional burden. It is simply your bank fulfilling its obligation to update records with the tax ID that was automatically created for you when you got your NIN.

The service is completely free. According to the insider, customers will not be charged for this update. “It’s free, so automatically, once you have a bank account, your bank can utilise the capability FIRS has created.”

For those worried about privacy or data security, the system only works with information already held by financial institutions. Banks are not accessing new data but rather using existing NIN records to retrieve corresponding tax IDs through an official government API.

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