New Bill Requires Tax ID for Opening Bank Accounts

A new bill proposed in Nigeria will require 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 operating existing ones.

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,” the legislation aims to boost tax compliance and improve revenue collection. The bill also mandates that non-residents supplying taxable goods or services to Nigeria, or earning income from the country, must register for tax purposes and obtain a TIN.

However, non-residents earning passive income from investments in Nigeria are exempt from this registration requirement but must still provide relevant tax information.

Additionally, the bill empowers tax authorities to automatically register and issue a TIN to individuals who fail to comply. In such cases, the authority must notify the individual of their registration. Non-compliance with these rules may result in penalties, including a N50,000 fine for the first month of non-compliance and N25,000 for each subsequent month.

The proposed legislation is part of broader efforts to ensure that all participants in financial activities are properly registered for tax purposes and contribute to the country’s revenue system.