New bill proposes Tax ID requirement for bank account opening

New bill proposes Tax ID requirement for bank account opening

A new legislative proposal in Nigeria requires individuals engaged in banking, insurance, stockbroking, or other financial services to provide a Tax Identification Number (TIN) before opening a new account or managing an existing one.

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", seeks to enhance tax compliance and streamline the nation's revenue collection process.

Dated October 4, 2024, and obtained from the National Assembly, the bill stipulates,

"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."

New bill proposes Tax ID requirement for bank account opening

This measure aims to ensure that all individuals and entities within the financial sector are accurately registered for tax purposes.

The bill also extends this requirement to non-residents supplying taxable goods or services or deriving income from Nigeria, who must register for tax and obtain a TIN.

However, non-resident individuals whose income is solely from passive investments in Nigeria are exempt from registration but must supply necessary information as outlined by the tax authorities.

Moreover, the bill grants tax authorities the power to automatically issue a TIN to individuals who neglect to register. In these cases, tax authorities are required to promptly inform the individual of their registration and the TIN issuance.

Non-compliance with these new requirements will attract administrative penalties, with the bill specifying fines of ₦50,000 for the first month of failure to register, and ₦25,000 for each subsequent month.

Comments

Keep up to date with our latest articles and uploads...