In Nigeria, a new bill has been introduced that would make obtaining a Tax Identification Number a requirement for anyone working in banking, insurance, stock broking, or other financial services before they can establish a new account or use an existing one.
According to the new bill, 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”, this legislation aims to enhance tax compliance and improve the country’s revenue collection process.
The bill, obtained from the National Assembly and dated October 4, 2024, stated, “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 is a part of larger initiatives to make sure that all people and organizations involved in financial transactions are correctly registered with the government.
The measure also stipulates that non-residents who receive money from Nigeria or who provide taxable products or services to any anyone in the nation are required to register for taxes and acquire a Tax ID.
Non-resident people who merely get passive income from investments in Nigeria, however, will not be needed to register; instead, they only require to submit the pertinent data as directed by the relevant tax body.
Additionally, the proposed legislation gives the relevant tax authority the ability to automatically register and issue Tax IDs to anyone who should have applied for them but didn’t.
In certain situations, the tax authorities must notify the person of their registration and the tax ID’s issue as soon as possible.
Failure to abide with these regulations may result in administrative penalties. A taxable person who does not register for tax will be penalized N50,000 in the first month of non-compliance and N25,000 in each succeeding month, according to the bill.
