New tax bills mandate finance workers to have tax id to operate bank accounts.

Purpose of the Bill

The bill submitted by the executive to the National Assembly, aims to ensure tax compliance and increase the government’s revenue collection. Its full title describes its purpose: “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.

Reas Also: Nigeria’s net forex inflow increases by 67% to $27.6bn

In the case of foreigners only make passive income from investments in Nigeria, they do not have to register for a TIN. Instead, they are required to provide the necessary details as requested by the relevant Nigerian tax authority.

The bill also gives tax authorities the power to automatically register people for a TIN if they are supposed to apply for one but fail to do so. After registering these individuals, the tax authorities must notify them about the registration and issuance of the TIN.

The bill went further to state that anyone who doesn’t comply with the tax registration requirement could face penalties. Specifically, if someone who is required to register for a TIN fails to do so, they will be fined N50,000 for the first month of non-compliance and N25,000 for each additional month after that.

What You Should Know

The reforms being considered include raising the Value Added Tax (VAT) to increase government revenue and providing tax exemptions for low-income earners. The idea is to address income inequality by spreading the tax burden more fairly across different sectors of the economy.