A newly proposed bill in Nigeria mandates that individuals involved in banking, insurance, stock-broking, or any financial services provide a Tax Identification Number (TIN) before opening new accounts or continuing to operate existing ones.
The bill, titled “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,” is designed to bolster tax compliance and strengthen Nigeria’s revenue collection.
The National Assembly document, dated October 4, 2024, specifies, “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.”
This requirement aims to ensure that all individuals and businesses in financial activities are properly registered for tax purposes. It also stipulates that non-resident entities providing taxable goods or services within Nigeria, or earning income in the country, must register for a tax ID.
However, non-residents earning only passive income from Nigerian investments are exempt from full registration but must submit pertinent information to the relevant tax authority.
Additionally, the bill grants tax authorities the power to register and issue a TIN to individuals who fail to apply. In such cases, the authorities must inform the individual promptly about the registration and issuance of the TIN.
Failure to meet these requirements will incur penalties. Any taxable person who does not register for tax will face an initial fine of ₦50,000, followed by a monthly penalty of ₦25,000 until they comply.
