Federal Inland Revenue Service Announces: NIN to Serve as Tax Identification Number for Individuals and CAC Number for Businesses Effective 2026

Federal Inland Revenue Service Announces: NIN to Serve as Tax Identification Number for Individuals and CAC Number for Businesses Effective 2026

In a significant development aimed at streamlining Nigeria’s tax administration, the Federal Inland Revenue Service (FIRS) has announced that the National Identification Number (NIN) will automatically serve as the Tax Identification Number (Tax ID) for individual Nigerians. Simultaneously, the Corporate Affairs Commission (CAC) registration number (RC number) will function as the official tax identifier for registered businesses. This policy shift, clarified by the FIRS in late December 2025, is part of broader tax reforms under the Nigeria Tax

Administration Act (NTAA), set to take full effect from January 1, 2026.

The announcement addresses widespread public concerns and misinformation surrounding the new tax framework, particularly regarding the need for separate Tax IDs and their implications for everyday activities like banking.

Understanding the New Tax ID System

Previously, Nigeria operated a system where individuals and businesses often required a distinct Tax Identification Number (TIN) issued by the FIRS or state internal revenue services. This led to duplication, administrative bottlenecks, and challenges in tracking taxpayers effectively.

The new unified approach integrates existing national identification systems:

•  For individuals — The NIN, issued by the National Identity Management Commission (NIMC), now automatically doubles as the Tax ID. No additional registration or physical card is needed; the Tax ID is simply the unique 11-digit NIN linked directly to the individual’s identity.

•  For registered businesses — The CAC RC number, assigned during company incorporation, automatically serves as the Tax ID. This eliminates the need for a separate TIN application for most corporate entities.

According to  Channels Television, The FIRS emphasized that this unification consolidates all prior TINs issued by federal and state authorities into a single, harmonized identifier. The goal is to simplify compliance, reduce paperwork, and enhance data accuracy across government agencies.

This reform builds on existing regulations. For instance, the Finance Act of 2019 had already introduced TIN requirements for certain transactions, including business banking. The NTAA strengthens these provisions while leveraging foundational IDs like the NIN and CAC numbers.

Benefits of the Unified Tax ID System

The shift to NIN and CAC numbers as Tax IDs offers several advantages:

1.  Simplified Compliance
Taxpayers no longer need to apply for separate TINs, saving time and reducing bureaucratic hurdles. Individuals with a valid NIN are automatically compliant for tax purposes, provided they earn taxable income.

2.  Enhanced Efficiency and Transparency
By linking tax records to established national databases, the system minimizes duplication and errors. Government agencies can better coordinate data, leading to more accurate revenue tracking.

3.  Closing Loopholes for Tax Evasion
The unified identifier makes it harder for taxable individuals or businesses to operate outside the tax net. This promotes fairness, ensuring everyone who earns income contributes appropriately.

4.  Broader Tax Net Inclusion
With over 123.9 million Nigerians having obtained NINs as of October 2025 (per NIMC data), millions are now automatically captured in the tax system. This could significantly boost government revenue without imposing new burdens.

5.  Seamless Integration with Banking and Services
Banks and financial institutions can verify Tax IDs using NIN or CAC details during onboarding. This dispels fears that the policy would restrict access to banking services.

Addressing Public Concerns and Misinformation

The announcement followed public anxiety over reports that all Nigerians would need a TIN to open or maintain bank accounts starting in 2026. The FIRS clarified that the requirement applies only to taxable persons - those earning income through trade, business, or other economic activities.

Non-taxable individuals, such as students, dependents, or those without taxable income, are not required to obtain or use a Tax ID for basic services. Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, reiterated that the policy targets compliance for income earners, not blanket enforcement. (Punch News)

The FIRS urged Nigerians to disregard misinformation, assuring that the reforms prioritize efficiency and fairness over hardship.

Implications for Individuals and Businesses

For everyday Nigerians, the change is largely positive. If you already have a NIN, you’re set - no action is required unless you’re filing taxes or engaging in taxable activities. Those without NINs should enroll promptly through NIMC centers to avoid future issues.

Business owners benefit from automatic integration. New companies registered with CAC will have their RC number serve as the Tax ID immediately, streamlining incorporation and tax compliance.

However, unregistered informal businesses or sole proprietors may need to formalize operations to fully leverage the system. The policy encourages registration, which could boost the formal economy.

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Looking Ahead: A More Modern Tax Administration

This reform represents a step toward a digital, integrated tax ecosystem in Nigeria. By aligning tax identification with national identity frameworks, the government aims to improve revenue collection, reduce evasion, and foster economic transparency.

As the NTAA rolls out in 2026, taxpayers should stay informed through official FIRS channels. The policy underscores a commitment to modern governance, where existing tools like NIN and CAC numbers drive efficiency rather than creating new obstacles.

In summary, the FIRS’s clarification marks a practical and inclusive approach to tax administration. By making NIN the Tax ID for individuals and CAC numbers the identifier for businesses, Nigeria is moving toward a simpler, fairer, and more effective system that benefits both taxpayers and the nation.