Finance bill 2021: TIN mandatory for all bank account holders

Finance bill 2021: TIN mandatory for all bank account holders

Individuals in Nigeria will now be mandated by commercial banks to present their Tax Identification Number (TIN), before opening an account for them.

This is contained in the Finance Bill 2021 which also demands that existing bank customers present their TIN, if they wish to continue to operate their accounts.

Senator Yahaya Abdullahi on Wednesday made this disclosure in his lead debate on the bill sent to the National Assembly by the President, Muhammadu Buhari on Tuesday.

According to the senator, “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.”

The proposed bill also makes it mandatory for foreign firms such Google, Facebook, Twitter and other such platforms to pay taxes to the Federal Government of Nigeria.

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

“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.”

He also said the penalty for Value Added Tax late filing of returns has been reviewed upwards to N50, 000 for the first month and N25, 000 for subsequent months of failure.

“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.”

The bill made electronic mails as the only channel that tax authorities would accept as a formal means of correspondence with taxpayers, the senator noted.

On the Personal Income Tax Act, Abdullahi said, “On the other hand, the bill seeks to remove the tax exemption on withdrawals from pension schemes except the prescribed conditions are met.

Author: Greg