New Invoice Proposes Tax ID for Opening Financial institution Accounts

New Invoice Proposes Tax ID for Opening Financial institution Accounts

A brand new invoice has been proposed in Nigeria that can 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.

In response to 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 individual supplying taxable items or providers to any particular person in Nigeria or deriving revenue from the nation should register for tax functions and procure a Tax ID.

Nevertheless, non-resident people who derive solely passive revenue from investments in Nigeria is not going to be required to register, though they need to present related info as prescribed by the related tax authority.

The proposed laws additionally empowers the related tax authority to routinely register and subject a Tax ID to people who ought to apply for one however fail to take action.

In such instances, 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 could lead to administrative penalties. In response to the invoice, a taxable one that 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.