The federal government has unveiled a new bill requiring all individuals involved in banking, insurance, and stockbroking to provide a tax identification number (TIN) when opening or operating any accounts.
Presented to the National Assembly by the executive, the bill aims to strengthen tax compliance and optimize revenue collection across Nigeria.Dated 4 October, the bill is 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.”“A person engaged in banking, insurance, stockbroking, 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 document reads.However, non-resident individuals who earn only passive income from investments in Nigeria will not be required to register; instead, they will need to provide the necessary information as instructed by the relevant tax authority.Furthermore, the bill grants authority to the appropriate tax body to automatically register and issue tax identification numbers to individuals who are obligated to apply for one but fail to do so.
In such instances, the bill mandates that the tax authority must promptly inform the individual of their registration and the issuance of the tax identification number. The document also notes that failure to meet the requirements could lead to administrative penalties.According to the bill, if a taxable individual fails to register for taxes, they will face a penalty of N50,000 for the first month of non-compliance and N25,000 for each additional month thereafter.What you should know: The ongoing tax reform initiative by the federal government commenced shortly after President Bola Tinubu established a tax and fiscal reform committee in August 2023, led by renowned tax expert Taiwo Oyedele. This committee was tasked with the critical responsibility of overhauling Nigeria’s tax system to create a more efficient and growth-oriented structure that would stimulate economic development, enhance revenue collection, and foster greater compliance.My AI currently does not provide information for events that occurred after December 2023. Please check other reliable sources for more up-to-date information.
These include increasing the Value Added Tax (VAT) to boost government revenue and introducing tax exemptions aimed at providing relief for low-income earners. These measures are designed to address income inequality while ensuring that the tax burden is more evenly distributed across various economic sectors. In addition to these reforms, the committee has also been exploring other avenues to widen the tax base, improve transparency in tax collection, and eliminate loopholes that have previously undermined revenue generation.
