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A new legislative bill in Nigeria proposes that individuals involved in banking, insurance, stock-broking, and other financial services must provide a Tax Identification Number (TIN) as a mandatory requirement to open new accounts or continue operating existing ones.
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,” seeks to strengthen tax compliance and enhance revenue collection.
Dated October 4, 2024, and sourced from the National Assembly, the bill clearly states: “Any 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 one.”
This initiative forms part of the government’s broader strategy to ensure that all individuals and entities actively participating in the financial sector are registered for tax purposes, thereby boosting tax transparency and efficiency.
Additionally, the bill specifies that non-resident individuals supplying taxable goods or services to people in Nigeria or earning income from the country must also register for tax purposes and obtain a Tax ID. However, those earning passive income from investments in Nigeria will be exempt from the registration requirement but must still provide relevant information as prescribed by the tax authorities.
The bill grants tax authorities the power to automatically register individuals who are required to obtain a TIN but fail to do so. In such cases, the tax authority is obligated to promptly notify the individual of their automatic registration and the issuance of a Tax ID.
Non-compliance with these requirements will lead to administrative penalties, with the bill stipulating a N50,000 fine for the first month of non-registration, followed by N25,000 for each subsequent month of non-compliance.
This proposed legislation is part of Nigeria’s ongoing efforts to streamline tax processes and ensure that all financial actors contribute fairly to national and local revenue systems.
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