Bank account holders must now have TIN to operate accounts

Bank account holders in Nigeria now to have a Tax Identification Number (TIN) to operate accounts in the country.

Commercial banks according to the Finance Bill 2021 are mandated to demand TIN from individuals seeking to open an account as well as existing customers if they wish to continue to operate their accounts with them.

The bill also makes it mandatory for non-resident firms such Facebook, Google, Twitter, and other social media platforms that operate in the country to pay taxes to the Federal Government of Nigeria.

This was disclosed on the floor of the Senate on Wednesday by Senator Yahaya Abdullahi, in his lead debate on the bill, sent to the National Assembly by President Muhammadu Buhari, on Tuesday.

He said, “Banks will be required to request for Tax Identification Number before opening bank accounts for individuals while existing account holders must provide their TIN to continue operating their accounts.”

Part of the Bill read, “The bill makes provision for the Accelerate International Taxation Reforms to enhance the taxation of non-resident individuals and companies that nevertheless derive profits from Nigeria.”

Abdullahi also said that the proposed bill prescribes a penalty for failure to deduct tax, noting that this would also apply to agents appointed for tax deduction.

Abdullahi said, “This penalty is 10 per cent of the tax not deducted, plus interest at the prevailing monetary policy rate of the Central Bank of Nigeria. The conditions attached to tax exemption on gratuities have been removed.  Therefore, gratuities are unconditionally tax exempt.

“The duties currently performed by the Joint Tax Board as relates to administering the Personal Income Tax Act, will now be performed by the Federal Inland Revenue Service.

“This seems to be an error in the process of amendments to replace the word “Board” as it appears in Federal Board of Inland Revenue.”

The senator further said, “The penalty for failure to register for VAT is reviewed upwards to N 50,000 for the first month of default and N25,000 for each subsequent month of default.

“The penalty for failure to notify FIRS of change in company address to be reviewed upwards to N50,000 for the first month of default and N25,000 for each of the subsequent months of default.

“This penalty also covers failure to notify FIRS of permanent cessation of trade or business.  Quite significantly, the Finance Bill seeks to introduce sweeping changes to the tax laws covering seven different tax laws.

“Many of the changes are expected to have positive impacts on investments and ease of paying taxes, especially for the MSMEs.  Going forward, we hope that changes to the tax laws will be on an annual basis to ensure that Nigeria’s tax system continues to evolve in line with economic conditions”