A new bill in Nigeria seeks to make the provision of a Tax Identification Number (TIN) mandatory for individuals engaged in banking, insurance, stockbroking, and other financial services, as part of efforts to strengthen tax compliance and enhance revenue collection.
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,” was obtained from the National Assembly and dated October 4, 2024.
Under the bill’s provisions, no individual or entity in the financial services sector can open a new account or operate an existing one without providing a valid TIN.
This requirement forms part of a broader strategy to ensure that all financial participants are properly registered for tax purposes.
The bill also extends its reach to non-resident individuals who provide taxable goods or services in Nigeria or earn income from the country.
These individuals must register for tax purposes and obtain a TIN.
However, non-residents with passive investment income in Nigeria will be exempt from the registration requirement, though they must still provide relevant information to tax authorities.
Additionally, the bill empowers tax authorities to automatically register individuals who fail to comply with the TIN application requirement.
In such cases, individuals will be notified of their registration and the issuance of a TIN. Non-compliance may result in penalties, with a first-month fine of N50,000 followed by N25,000 for each additional month of non-compliance.
The proposed legislation underscores Nigeria’s ongoing efforts to improve its tax collection system and reduce revenue leakages by ensuring that all financial actors are accountable to tax authorities.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
