Nigerians engaged in banking, insurance, stock-broking, and other financial services are to provide a Tax Identification Number as a perequisite for opening a new account or upgrading an existing one.
This is coming from a bill proposed in the National assembly earlier this month but made available via a media outlet to the public today, 11th of October, 2024.
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 new legislation aims to enhance tax compliance and improve the country’s revenue collection procedures.
The bill reads thus : “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.”
The new requirement is part of deliberate efforts to ensure that all individuals and entities participating in financial activities in the country are properly registered for tax purposes.
There is also an outline in the bill that, any non-resident person supplying taxable goods or services to any individual in Nigeria or deriving income from the country must register for tax purposes and obtain a Tax ID.-
It further noted that, non-resident individuals who derive only passive income from investments in Nigeria will be exempted, although, they are to provide needed information as prescribed by the tax authority.
The proposed bill will also empower the relevant tax authority to automatically register and issue a Tax ID to individuals who should apply for one but fail to do so.
In such the above case, the tax authority is required to quickly notify the individual of their registration process and the issuance of the tax Identification identify number.
It also emphasized that, failure to comply with these requirements may attract administrative penalties.
The bill highlights that, a taxable person who fails to register for tax will incur a penalty of N50,000 warrant in the first month of non-compliance, followed by N25,000 for each subsequent month that follows.
