New Bill Implements Tax ID Requirement For Bank Accounts

New Bill Implements Tax ID Requirement For Bank AccountsA new bill has been introduced in Nigeria that mandates individuals involved in banking, insurance, stock-broking, or other financial services to provide a Tax Identification Number (TIN) as a prerequisite for opening new accounts or managing existing ones.....KINDLY READ THE FULL STORY HERE▶

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,” aims to strengthen tax compliance and enhance the nation’s revenue collection framework.

Dated October 4, 2024, and sourced from the National Assembly, the bill states, “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 part of a broader initiative to ensure that all individuals and entities involved in financial activities are properly registered for tax purposes.

Additionally, the bill stipulates that any non-resident individual supplying taxable goods or services to anyone in Nigeria or earning income from the country must register for tax purposes and obtain a Tax ID. However, non-residents who only receive passive income from investments in Nigeria are exempt from registration, although they are required to provide relevant information as specified by the appropriate tax authority.

The proposed legislation also grants the relevant tax authority the power to automatically register individuals who should apply for a Tax ID but neglect to do so. In these cases, the tax authority must promptly inform the individual of their registration and the issuance of the Tax ID.

Non-compliance with these regulations could lead to administrative penalties. Specifically, a taxable person who fails to register for tax will face a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.

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