Nigeria is set to bolster its tax compliance efforts with a newly proposed bill that will require individuals and entities engaged in banking, insurance, stock-broking, and other financial services to provide a Tax Identification Number (TIN) as a prerequisite for opening or operating accounts.
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,” was introduced in the National Assembly and dated October 4, 2024. It aims to enhance the country’s revenue collection and ensure that all participants in financial activities are properly registered for tax purposes.
According to the provisions outlined in the bill, “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.” This initiative reflects Nigeria’s broader commitment to improving tax compliance and curbing tax evasion, as officials believe that a more structured approach to tax registration will facilitate better oversight of financial transactions.
Furthermore, the bill extends its reach to non-resident individuals supplying taxable goods or services within Nigeria, mandating that they also register for tax purposes and obtain a TIN. This inclusion is seen as a critical step in ensuring that foreign entities contributing to the Nigerian economy are also fulfilling their tax obligations.
Financial experts have expressed support for the legislation, emphasizing that a robust tax identification system is vital for transparency and accountability in financial dealings. By ensuring that all participants are registered, the government aims to enhance its capacity to collect revenue and allocate resources effectively.
As Nigeria continues to navigate economic challenges, this proposed bill could play a significant role in reinforcing the nation’s tax framework, promoting fairness in the financial sector, and ultimately contributing to economic growth.
