A new bill proposed in Nigeria will require individuals engaged in insurance, banking, stock-broking, and other financial services to provide a Tax Identification Number (TIN) as a mandatory precondition for opening new accounts or operating existing ones. 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,” seeks to enhance tax compliance and improve revenue collection across the country.
According to the document obtained from the National Assembly on October 4, 2024, the legislation aims to ensure that all individuals and entities participating in financial and insurance activities are properly registered for tax purposes. Insurance companies, along with banks and stock-broking firms, will be required to enforce this provision before providing services to clients.
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In addition to individuals residing in Nigeria, the bill mandates that non-resident individuals supplying taxable goods or services or deriving income from the country must register for tax purposes and obtain a TIN. However, those earning only passive income from investments in Nigeria will be exempt from registration but are still required to submit relevant information to the appropriate tax authorities.
The proposed legislation also grants tax authorities the power to automatically register and issue TINs to individuals who fail to apply. If a taxable person does not comply, the bill prescribes administrative penalties, with an initial fine of N50,000 for the first month of non-compliance, followed by N25,000 for each subsequent month.
The bill represents a broader government effort to streamline tax registration and improve transparency in the insurance and financial sectors while ensuring greater participation in the country’s tax system.
