Abuja, Nigeria – A new bill aimed at strengthening tax compliance and improving Nigeria’s revenue collection system has been proposed, targeting individuals and entities involved in financial services. The legislation, 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,” introduces several provisions to enhance tax accountability.
According to the bill, which was obtained from the National Assembly and is dated October 4, 2024, individuals engaged in banking, insurance, stock-broking, or other financial services will now be required to provide a Tax Identification Number (TIN) as a mandatory condition for opening new accounts or operating existing ones. This is part of a broader effort to ensure that all participants in Nigeria’s financial system are properly registered for tax purposes.
The bill also includes provisions for non-resident individuals who derive taxable income from Nigeria. Such individuals must register for tax purposes and obtain a TIN if they are involved in supplying goods or services to Nigerians. However, those deriving only passive income from investments are exempt from registration but must still provide relevant information to tax authorities.
Additionally, the proposed legislation grants tax authorities the power to automatically register and issue TINs to individuals who fail to do so. The relevant tax authority is obligated to notify the individuals once they have been registered and assigned a TIN.
Non-compliance with these requirements will attract penalties, with an initial fine of N50,000 for the first month of failing to register, followed by N25,000 for each subsequent month of continued non-compliance. These penalties highlight the government’s commitment to enforcing tax regulations and expanding the tax net to include all individuals and entities involved in the financial sector.