A new bill has been proposed in Nigeria mandating that individuals involved in banking, insurance, stock-broking, and other financial services must provide a Tax Identification Number to open new accounts or operate existing ones.
According to the bill, 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”, this legislation aims to enhance tax compliance and improve the country’s revenue collection process, according to The Punch.
According to the bill, 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”, this legislation aims to enhance tax compliance and improve the country’s revenue collection process.
The bill, obtained from the National Assembly and 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.”
This requirement is part of a wider initiative to ensure that all individuals and entities involved in financial activities are correctly registered for tax purposes.
However, non-resident individuals who derive only passive income from investments in Nigeria will not be required to register, although they must provide relevant information as prescribed by the relevant tax authority.
The proposed legislation also empowers the relevant tax authority to automatically register and issue a Tax ID to individuals who should apply for one but fail to do so.
Under the proposed bill, tax authorities are required to promptly notify individuals of their registration and the issuance of their TIN.
Failure to comply with these requirements could lead to administrative penalties.
Specifically, a taxable person who fails to register for tax will face a penalty of N50,000 for the first month of non-compliance, with an additional charge of N25,000 for each subsequent month.
This framework is designed to encourage timely registration and adherence to tax obligations.
