Business a.m.
Nigeria’s lawmakers are set to introduce a groundbreaking legislative proposal, requiring all individuals engaged in financial services, including banking, insurance, and stock broking, to provide their Tax Identification Number (TIN) before opening new accounts or operating existing ones.
The proposed legislation, titled “A Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States, and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters”, aims to improve tax compliance and simplify the nation’s revenue collection process, empowering tax authorities to effectively collect and account for revenue accruing to the federation.
The bill, dated October 4, 2024, stated; “A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall make the provision of a tax ID, a precondition for opening a new account or operating an existing account.”
The proposed requirement seeks to enforce accurate tax registration for all individuals and entities within Nigeria’s financial sector.
Furthermore, the bill broadens this mandate to encompass non-residents supplying taxable goods or services, or deriving income from Nigeria, who must register for tax and obtain a TIN before engaging in any taxable activities.
Although the bill mandates tax registration for non-resident individuals involved in taxable activities within Nigeria, it carves out an exemption for those whose income solely stems from passive investments.
However, these individuals must still supply the necessary information as mandated by the tax authorities, in order to promote transparency and accountability in the financial system.
The bill grants tax authorities additional powers, allowing them to automatically issue a TIN to individuals who neglect to register. In such instances, the tax authorities are obligated to promptly notify the individual of their registration status and inform them of their newly issued TIN.
Failure to comply with the proposed requirements will result in severe administrative penalties, with the bill prescribing a fine of N50,000 for the first month of non-registration and an additional N25,000 for every subsequent month of non-compliance.
