Explainer: Why FG is Planning to Harmonise Your NIN with Tax Identification Number
The Federal Government of Nigeria, through the Ministry of Interior, is proposing the harmonisation of the National Identification Number (NIN) of Nigerians with their Tax Identification Number (TIN).
Dr. Olubunmi Tunji-Ojo, Minister of Interior, in a statement on Monday, June 10, 2024, made through Ozoya Imohimi, the ministry’s Director of Press and Public Relations, said that the move is to create an easier integrated system for tracking taxable income.
How the Harmonisation Will Aid in Tax Tracking
Leveraging technology, the motive behind this move is to tackle the perennial issue of tax evasion, which is believed to result in significant revenue losses for the government, as less than 30 percent of taxable Nigerians pay tax. It is believed that many individuals and expatriates in Nigeria have been exploiting the current system’s loopholes to avoid paying taxes.
By harmonising the NIN and TIN, the government intends to create a unique security identifier that displays tax status and relevant information, making it more difficult for individuals to evade tax.
How It Will Work
Currently, the NIN and TIN are issued by different agencies, leading to a disjointed system that allows some individuals to operate outside the tax net. The NIN, issued by the National Identity Management Commission (NIMC), is meant to be a universal identifier for all Nigerians, while the TIN, issued by the Federal Inland Revenue Service (FIRS), is specifically for tax purposes. By integrating these two numbers, the government can ensure that all taxable individuals are captured in the system.
There has been a concerted effort by the administration of President Bola Tinubu to widen the country’s tax net while increasing compliance among the public. In July last year, Zacch Adedeji, executive chairman of FIRS, said that the government aims to achieve a minimum of an 18 percent tax-to-GDP ratio within the next 3 years.
“Our aim is to transform the tax system to support sustainable development and achieve a minimum of an 18% tax-to-GDP ratio within the next 3 years without stifling investment or economic growth,” Zacch Adedeji, a presidential adviser on revenue, said in the statement.
Recent Developments
Four days ago, on June 6, the Secretary of the Joint Tax Board (JTB), Mr. Olusegun Adesokan, met with Tunji-Ojo to establish the grounds for potential collaborative initiatives towards a data harmonisation drive, while strengthening existing relationships with the Nigeria Immigration Service (NIS) and other agencies under the supervisory umbrella of the Ministry, including the NIMC.
Tunji-Ojo, while noting that “many expatriates today are evading tax both at state and federal levels,” said, “the relationship between the JTB and NIS should be like Siamese twins,” adding that “if there is synergy, a lot will be achieved.”
