A newly proposed bill in Nigeria will mandate that individuals involved in banking, insurance, stockbroking, or other financial services must present a Tax Identification Number (TIN) before opening a new account or operating an existing one.
The legislation 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,’ aims to enhance tax compliance and improve the country’s revenue collection process.
“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,” says the bill dated October 4, 2024.
According to the Federal Inland Revenue Service (FIRS), a Tax Identification Number (TIN) is a unique number issued by FIRS or State Board of Internal Revenue (SBIR) that identifies you for tax purposes. Think of it as your tax identity – no individual taxpayer can operate without a valid TIN.
This requirement is part of a larger initiative aimed at ensuring that all individuals and entities involved in financial transactions are appropriately registered for tax purposes.
The bill also says that if you’re a non-resident supplying taxable goods or services to anyone in Nigeria or making money from the country, you’ll need to sign up for tax purposes and grab yourself a Tax ID.
No Tax ID, no business.
However, non-resident individuals who earn only passive income from investments in Nigeria will not be required to register, though they must still provide necessary information as specified by the tax authority.
The proposed law also grants the tax authority the power to automatically register and issue a Tax ID to individuals who are obligated to apply but fail to do so. In such cases, the tax authority must promptly inform the individual of their registration and the issuance of the Tax ID.
Failure to meet these requirements may lead to administrative penalties.
According to the bill, a taxable person who does not register for tax will face a fine of N50,000 ($30.53) for the first month of non-compliance, and N25,000 ($15.27) for each additional month of non-compliance.
In August 2024, BitKE reported that FIRS Nigeria is set to introduce a comprehensive bill to revamp Nigeria’s tax administration system, including the regulation of the cryptocurrency industry.
🇳🇬TAXATION | Nigeria’s Revenue Service, FIRS, To Introduce Comprehensive Taxation Covering Cryptocurrencies
The proposed legislation seeks to simplify tax laws, harmonize revenue collection, and replace outdated tax regulations with contemporary frameworks.
The move comes amid… pic.twitter.com/gB2prTbFys
— BitKE (@BitcoinKE) August 21, 2024
The move comes amid an ongoing saga involving cryptocurrency exchanges, including the giant, Binance, which according to Nigerian officials had an untaxed turnover of over $20 billion in Nigeria in 2023 alone.
🇳🇬REGULATION | #Binance Had an Untaxed Turnover of $20 Billion in Nigeria in 2023 Alone, Far Above the Federal Budget for Health and Education, Says Minister of Information
The Minister noted that Binance’s turnover was not taxed by the government and exceeded Nigeria’s budget… pic.twitter.com/5pqCu4WEb9
— BitKE (@BitcoinKE) June 10, 2024
The exchange is accused of not paying value-added tax and corporate tax, as well as failing to file tax returns, and is yet to be acquitted as of this writing.
Follow us on X for the latest posts and updates
Join and interact with our Telegram community
___________________________________________
___________________________________________
