The federal government has unveiled a new bill aimed at significantly transforming the financial services sector in Nigeria. The proposed legislation mandates that all individuals involved in banking, insurance, and stockbroking must provide a tax identification number (TIN) before opening or operating any account.
Submitted to the National Assembly on October 4, the bill 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.” Its primary objectives are to enhance tax compliance and streamline revenue collection across the country.
According to the bill, “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.”
Additionally, the bill requires that any non-resident supplying taxable goods or services in Nigeria or deriving income from the country must register for tax purposes and obtain a tax ID. However, non-resident individuals who only receive passive income from investments in Nigeria will not be required to register; they will instead need to provide relevant data as directed by the appropriate tax authority.
The legislation further empowers the applicable tax authority to automatically register individuals who are required to obtain a tax ID but do not apply for one. In such instances, the tax authority must promptly notify the individual of their registration and the issuance of the tax ID.
Failure to comply with these requirements could lead to administrative penalties. The bill stipulates that individuals who do not register for taxes will face a fine of ₦50,000 in the first month of non-compliance and ₦25,000 for each subsequent month.