The Nigerian federal government has introduced a significant bill aimed at overhauling the financial services sector, mandating that all individuals involved in banking, insurance, and stockbroking must provide a Tax Identification Number (TIN) prior to opening or operating any accounts.
Submitted to the National Assembly, the 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,” was dated October 4.
According to the proposed legislation, “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.”
In addition, the bill addresses non-resident individuals, stipulating that those supplying taxable goods or services to Nigerian citizens or earning income within the country must register for tax purposes and obtain a tax ID. However, non-residents earning only passive income from investments in Nigeria will not be required to register but must submit relevant data as instructed by the appropriate tax authority.
The bill empowers tax authorities with the jurisdiction to automatically register individuals who fail to apply for a tax ID when required. In such instances, the tax authority must promptly inform the individual of their registration and the issuance of the tax ID.
Failure to comply with the bill’s stipulations could lead to administrative penalties. Specifically, taxable individuals who do not register for taxes may face a fine of ₦50,000 for the first month of non-compliance and ₦25,000 for each subsequent month thereafter.
This legislative move is expected to enhance tax compliance and streamline revenue collection across Nigeria, reflecting the government's commitment to improving the financial ecosystem and ensuring accountability within the sector.
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