The federal government has introduced a new bill that mandates individuals involved in banking, insurance, stock brokerage, or other financial services to provide a Tax Identification Number (TIN) before they can open a new account or manage an existing one.
The purpose of this bill is to strengthen tax compliance and enhance the country’s revenue collection process, as stated by the government.
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,” the legislation seeks to bolster tax compliance and improve revenue collection.
According to the document from the National Assembly dated October 4, 2024, it specifies that “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.”
This requirement is part of a wider initiative to ensure that all individuals and entities involved in financial activities are properly registered for tax purposes.
The bill also stipulates that any non-resident individual supplying taxable goods or services to individuals in Nigeria or earning income from the country must register for tax purposes and obtain a Tax ID. However, non-resident individuals earning only passive income from investments in Nigeria are exempt from registration, although they must provide relevant information as directed by the appropriate tax authority.
Additionally, the proposed legislation grants the tax authority the power to automatically register and issue a Tax ID to individuals who should apply for one but fail to do so. In such instances, the tax authority must promptly inform the individual of their registration and Tax ID issuance.
Non-compliance with these requirements could lead to administrative penalties. The bill states that a taxable person who fails to register will face a penalty of N50,000 for the first month of non-compliance, followed by N25,000 for each additional month.
