The federal government has introduced a new bill that could drastically reshape the financial services sector, requiring all individuals involved in banking, insurance, and stockbroking to provide a tax identification number (TIN) before opening or operating any account.
Submitted to the National Assembly, the bill seeks to enhance tax compliance and streamline revenue collection across Nigeria. The bill, dated 4 October, is 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.”
“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,” the document reads.
Additionally, the bill stipulates that any non-resident supplying taxable goods or services to any individual in Nigeria or deriving income from the country is required to register for tax purposes and obtain a tax ID. However, non-resident individuals who derive only passive income from investments in Nigeria will not be obliged to register; instead, they will need to supply the relevant data as directed by the appropriate tax authority.
The bill under consideration confers jurisdiction upon the applicable tax authority to automatically register and issue tax IDs to individuals who are required to apply for one but choose not to do so.In such cases, the bill states that the tax authority is required to promptly notify the individual of their registration and the issuance of the tax ID. According to the document, failure to comply with the requirements may result in administrative penalties. The bill states that if a taxable individual does not register for taxes, they will be penalised ₦50,000 in the first month of non-compliance and ₦25,000 for each subsequent month.
