The National Assembly has proposed a new bill that will require individuals engaged in services as banking, insurance, stock-broking, or other financial services to provide a Tax Identification Number as a precondition for opening a new account or operating an existing one.
The bill, dated October 4, 2024, with the aim to improve tax compliance, thereby boosting the country’s revenue collection process 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”.
The bill provided that “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.”
According to reports, this condition is part of the large efforts to properly register all individuals and entities participating in financial activities for tax purposes.
The bill also states that any non-resident person supplying taxable goods or services to any individual in Nigeria or deriving income from the country must register for tax purposes and obtain a Tax ID.
However, non-resident individuals who derive only passive income from investments in Nigeria will not be required to register, although they must provide relevant information as prescribed by the relevant tax authority.
The proposed legislation also empowers the relevant tax authority to automatically register and issue a Tax ID to individuals who should apply for one but fail to do so.
In such cases, the tax authority is required to promptly notify the individual of their registration and the issuance of the tax ID.
The bill also states that any taxable person who fails to register for tax will incur a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.
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