[By Abigail Philip David]
A new bill has been proposed in Nigeria that mandates individuals involved in banking, insurance, stockbroking, and other financial services to provide a Tax Identification Number (TIN) as a prerequisite for opening or operating bank accounts.
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,”* aims to improve tax compliance and boost the country’s revenue collection.
Dated October 4, 2024, and obtained from the National Assembly, the bill states, “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.”
This measure is part of broader efforts to ensure that individuals and entities engaging in financial activities are properly registered for tax purposes.
The bill also requires non-resident persons supplying taxable goods or services to any individual in Nigeria or earning income from the country to register for tax and obtain a TIN. However, non-resident individuals who derive only passive income from investments in Nigeria are exempt from registering but must still provide information as required by the relevant tax authorities.
Furthermore, the bill empowers tax authorities to automatically register individuals who fail to apply for a TIN and issue them one. In such cases, the authorities are mandated to promptly inform the individual of their registration and the issuance of the TIN.
Non-compliance with the new regulations will attract penalties. Individuals who fail to register for tax will face a fine of N50,000 for the first month of non-compliance and N25,000 for each additional month thereafter.
