The news:

• Nigeria’s federal government has proposed a new bill requiring individuals in banking, insurance, stockbroking, and other financial services to provide a Tax Identification Number (TIN) before opening or operating a bank account. 
• 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,” was presented to the National Assembly on October 4, 2024.
• The bill aims to enhance tax compliance and improve revenue collection across Nigeria. 

According to its provisions, financial professionals must provide a TIN before operating accounts, ensuring they are properly registered for tax purposes. 

Non-resident individuals who earn only passive income from investments in Nigeria are exempt from this requirement but must submit relevant information to tax authorities.

The bill grants tax authorities the power to automatically register individuals who fail to apply for a TIN and notify them of their registration. 

By automatically issuing TINs to individuals who fail to register, tax authorities aim to close gaps that have historically enabled tax evasion. 

This automatic registration will simplify the process for both the government and citizens, reducing bureaucratic delays and ensuring that individuals are compliant without needing to take extra steps to register manually. 

Penalties for non-compliance include a fine of N50,000 for the first month and N25,000 for each subsequent month of failure to register.

This legislative move is part of broader tax reforms initiated by the President Bola Tinubu-led administration, which established a tax and fiscal reform committee in August 2023. The committee, led by tax expert Taiwo Oyedele, aims to overhaul Nigeria’s tax system to improve efficiency, promote economic growth, and ensure more equitable tax distribution. 

Reforms also include increasing the Value Added Tax (VAT) and providing tax exemptions for low-income earners.

The TIN requirement is one of several measures being considered to increase Nigeria’s tax base, improve collection transparency, and close revenue loopholes. By enforcing stricter tax registration and compliance measures, the government hopes to boost revenue while addressing income inequality.

This bill is expected to significantly impact Nigeria’s financial services industry, encouraging greater accountability and tax compliance from professionals and businesses.