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Banks, fintechs, and other financial institutions will now serve as debt recovery agents for Nigeria’s tax authority from 2026, according to TechCabal’s analysis of the newly implemented Nigeria Tax Administration Act, 2025.
Nigeria’s sweeping tax reforms have now taken full effect. The Federal Inland Revenue Service (FIRS) has been replaced by the Nigeria Revenue Service (NRS), stamp duties have supplanted electronic transfer levies, shifting the burden to senders, and the country’s most comprehensive tax overhaul in decades has moved from policy to enforcement.
The new law gives the NRS the power to outsource tax debt recovery to third parties, turning banks, fintechs, and other financial institutions into extensions of the tax authority. Once statutory recovery steps are exhausted, these entities can be tasked with recovering unpaid taxes directly from where money is held, a shift that could boost compliance but raises fresh concerns about oversight and safeguards.
Turning banks, fintechs into tax collectors
“The relevant tax authority may assign outstanding tax debts in whole or in part, to an accredited third party who shall assume responsibility for recovering the tax debts in accordance with the provisions of this Act or regulations issued by the Service,” the law reads.
Third parties are defined to include banks and other financial institutions, debt recovery practitioners, or any other person accredited by the relevant tax authority.
This is not Nigeria’s first attempt at third-party tax recovery. In 2018, the now-defunct FIRS and some State Internal Revenue Services appointed commercial banks as agents to recover taxes allegedly owed by customers, relying on provisions that allowed tax authorities to appoint any person as an agent of a taxpayer for collection purposes. Those efforts were largely controversial.
The 2025 Act now provides clearer statutory backing, opening the door to direct recovery from the source. For the NRS, this means deeper access to where money actually sits.
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