If you have gone to a supermarket or a nearby store to buy something recently and your method of payment was through bank transfer, there is a high chance the transfer was not accepted without narrations such as “for goods” or “family support”. What many customers are encountering is not an isolated decision by individual shop owners, but a wider shift in how small businesses are responding to changes in tax enforcement following Nigeria’s recent tax reforms.

For years, many businesses received transfers without stating the purpose of the payment. Since the new tax laws took effect on January 1, 2026, businesses are under increased pressure to keep clearer records of how money enters their accounts. While the laws themselves do not require customers to write specific phrases, businesses are increasingly insisting on narration to help classify transactions for reporting and audit purposes.

In practice, narration provides context that a transfer amount alone does not. When payments arrive without explanation, business owners face difficulty separating sales revenue from other inflows such as personal transfers, loans, or family support. That uncertainty creates risk during tax filings, reviews, or audits, particularly for small businesses that do not have advanced accounting systems.

This challenge is more pronounced for sole proprietorships and informal businesses, where personal income and business revenue often flow into the same bank account. In such setups, it becomes difficult to differentiate what constitutes a business sale versus family support or personal transfers.

A limited liability company, by contrast, operates dedicated business bank accounts and financial records tied strictly to business activity. This clearer separation simplifies tax reporting, reduces ambiguity, and makes transaction narrations more effective when classifications are required.

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Banks and mobile money platforms are also subject to broader reporting obligations, which has contributed to heightened scrutiny around transaction clarity. Narrations such as “for goods”, “payment for drinks”, “services rendered”, or “family support” help establish the nature of a transfer at the point of payment. To reduce future disputes or compliance issues, many small businesses now reject transfers without narration or ask customers to resend payments with a clear description.

What narration means for small businesses

For small business owners, narration has become a basic record-keeping safeguard rather than a formality. Many operate with limited margins and informal bookkeeping structures. When daily transfers arrive without explanation, it becomes difficult to determine what should be recorded as taxable revenue and what should not.

Unclear transaction records can expose businesses to problems during regulatory reviews. Multiple unexplained inflows may be treated as sales by default, even when some transfers are personal or unrelated to business activity. This can result in disputes, incorrect tax assessments, or additional compliance scrutiny. Insisting on narration is one way business owners attempt to reduce this ambiguity.

Narration also simplifies internal accounting. Instead of reconstructing transactions weeks later, business owners have immediate context for each payment. In a business environment where many small operators rely on manual tracking, this added clarity helps reduce errors and administrative stress.

What customers need to know

For customers, this shift means adjusting long-standing payment habits. Transfers made through bank apps, USSD, or mobile money without narration may be delayed or rejected. Including a short, clear description of the transaction has become part of completing a payment.

Narrations that directly reflect the transaction purpose, such as “payment for groceries”, “hair service”, “payment for service”, or “food items”, are generally sufficient. Vague entries, unrelated words, emojis, or leaving the narration field blank can create problems for the recipient.

Clear narration also benefits customers. In cases of disputes or payment confirmation, a descriptive transfer record serves as proof of what the payment was for, especially where receipts are not issued.

Why it is becoming more common now

The growing insistence on narration reflects a broader tightening around financial documentation rather than a coordinated policy announcement directed at consumers. As tax enforcement evolves, businesses are expected to demonstrate clearer links between income, expenses, and reported revenue. Narration is one of the simplest tools available to small businesses operating in a largely cashless but still informal economy.

This does not eliminate the challenges many businesses already face, including rising costs, uneven enforcement, and limited access to professional accounting support. However, for many operators, insisting on narration is a defensive response aimed at reducing uncertainty rather than an endorsement of the new tax framework itself.

In effect, narration has moved from being optional to being practical. It helps businesses manage their records, reduces friction during compliance checks, and ensures payments are accepted without delay. For consumers, understanding this shift makes everyday transactions smoother, even as the broader implications of the new tax laws continue to unfold.

Meiza Nigeria