A brand new invoice has been proposed in Nigeria that may require people engaged in banking, insurance coverage, stock-broking, or different monetary providers to supply a Tax Identification Quantity as a precondition for opening a brand new account or working an present one.
Based on the invoice, titled “A Invoice for an Act to Present for the Evaluation, Assortment of, and Accounting for Income Accruing to the Federation, Federal, States, and Native Governments; Prescribe the Powers and Features of Tax Authorities, and for Associated Issues”, this laws goals to boost tax compliance and enhance the nation’s income assortment course of.
The invoice, obtained from the Nationwide Meeting and dated October 4, 2024, said, “An individual engaged in banking, insurance coverage, stock-broking, or different monetary providers in Nigeria shall make the supply of a tax ID, a precondition for opening a brand new account or working an present account.”
This requirement is a part of broader efforts to make sure that all people and entities collaborating in monetary actions are correctly registered for tax functions.
The invoice additionally outlines that any non-resident particular person supplying taxable items or providers to any particular person in Nigeria or deriving earnings from the nation should register for tax functions and acquire a Tax ID.
Nonetheless, non-resident people who derive solely passive earnings from investments in Nigeria is not going to be required to register, though they have to present related data as prescribed by the related tax authority.
The proposed laws additionally empowers the related tax authority to routinely register and situation a Tax ID to people who ought to apply for one however fail to take action.
In such circumstances, the tax authority is required to promptly notify the person of their registration and the issuance of the tax ID.
Failure to adjust to these necessities might end in administrative penalties. Based on the invoice, a taxable one who fails to register for tax will incur a penalty of N50,000 within the first month of non-compliance, adopted by N25,000 for every subsequent month.