No Tax ID, No Contracts, New Act Stipulates

The recently gazetted Nigeria Tax Act, 2025, has introduced caller compliance requirements that tighten the fiscal nett connected contractors, authorities agencies, and overseas suppliers seeking concern successful the country.
Under the law, Ministries, Departments and Agencies (MDAs) indispensable guarantee that each contractors and suppliers contiguous a valid Tax Identification Number (Tax ID) earlier entering into oregon executing contracts.
While the Act does not explicitly necessitate contractors to contiguous a valid Tax Identification Number (Tax ID) earlier entering into oregon executing contracts, it mandates its inclusion successful the remittance process, which necessitates the MDAs having this information.

Specifically, for Value Added Tax (VAT) collected oregon withheld by authorities bodies, Section 155(3) of the Act stipulates: “The remission of the VAT nether subsections (1) and (2) shall beryllium accompanied with a docket showing the name, Tax ID and code of the contractor oregon supplier, invoice number, gross magnitude of invoice, magnitude of the VAT and the period to which the instrumentality relates”.

This proviso requires MDAs to person the Tax ID of contractors and suppliers for due VAT remittance. MDAs and Federal, State, and Local Governments are mandated to “collect oregon withhold VAT connected taxable supplies made to them and remit it to the Service”.

In addition, the Act introduces a caller compliance work for overseas suppliers. Section 151(1) explicitly states, “A non-resident idiosyncratic who makes taxable supplies to Nigeria shall registry for taxation and see VAT connected its invoice for each taxable supplies”

The instrumentality further empowers the Nigeria Revenue Service (NRS) established nether the Nigeria Revenue Service (Establishment) Act, 2025, to enforce compliance. This enforcement tin hap done nonstop postulation oregon by requiring Nigerian counterparties to withhold the tax.

As stated successful Section 151(2), “Where a non-resident idiosyncratic is making taxable supplies from extracurricular Nigeria to persons successful Nigeria, the taxable idiosyncratic to whom the proviso is made successful Nigeria shall withhold the VAT owed connected the proviso and remit it to the Service”. Furthermore, Section 151(3) adds that “The Service may, by notice, name immoderate person, including a non-resident supplier of taxable supplies, to cod the VAT and remit it to the Service”.

The NRS, established arsenic portion of the wider taxation reforms, is expected to people guidelines successful the coming weeks connected the registration process for overseas suppliers and compliance timelines for MDAs.
Section 151(7) of the Act grants this power, stating: “The Service whitethorn contented guidelines for the intent of giving effect to the provisions of this section, including the form, clip and process for filing returns and outgo by non-resident suppliers appointed by the Service nether subsection (3)”.