Proposed bill seeks to mandate tax ID for opening bank accounts
In an effort to establish a comprehensive fiscal framework for tax regulation, a new bill has been proposed to mandate all individuals to own and present a tax identification number before opening a new bank account or operating an existing one.
According to reports, the bill dated 4 October 2024 was obtained from the national Assembly and 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”.
the bill clearly states that “A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall make the provision of a tax ID, a precondition for opening a new account or operating an existing account.”
Those expected to obtain a tax ID include a non-resident who supplies taxable goods or services to any individual in Nigeria or makes income from the country.
However, a clause states that non-residents who get only passive income from investments in Nigeria will not be required to register, but are required to provide relevant information as prescribed by the relevant tax authority.
The proposed bill also empowers the relevant tax authority to automatically register and issue a Tax ID to individuals who are mandated to apply but for one reason or another fail to do so.
If such a situation arises, the tax authority is expected to promptly notify the individual of their registration and the issuance of the tax ID.
Following this, the bill states that failure to comply with these requirements may result in administrative penalties such as a taxable individual who fails to register for tax will incur a penalty of N50,000 in the first month of non-compliance, followed by N25,000 for each subsequent month.
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