The proposed legislative bill in Nigeria is a significant step towards enhancing tax compliance and improving revenue collection in the country. By requiring a Tax Identification Number (TIN) for individuals involved in banking, insurance, stock-broking, and other financial services, the bill aims to create a more streamlined and accountable financial system.
Here are some key points about the bill:
- Mandatory TIN Requirement: Individuals and entities in the financial sector must provide a TIN before opening or operating any accounts. This requirement aims to ensure accurate tax registration and compliance.
- Extension to Non-Residents: Non-residents supplying taxable goods or services in Nigeria must also register for tax and obtain a TIN. However, those whose income is solely from passive investments in Nigeria are exempt from this requirement.
- Automatic TIN Issuance: The bill empowers tax authorities to issue a TIN automatically to individuals who fail to register. They must inform the individual of the registration and the TIN issuance, promoting transparency and accountability.
- Penalties for Non-Compliance: The bill imposes administrative penalties for non-compliance, starting with a fine of ₦50,000 for the first month of failure to register and ₦25,000 for each subsequent month. This creates a financial incentive for timely compliance.
- Objective of the Legislation: Overall, the legislation seeks to enhance tax compliance, increase government revenue, and ensure that all individuals and entities operating in the financial sector are properly accounted for in the tax system.
This proposed bill could have wide-ranging implications for individuals and businesses in Nigeria, emphasizing the importance of tax registration and compliance as part of the government’s efforts to improve financial governance.