By Modupe Gbadeyanka
From 2022, bank account holders in Nigeria will likely have to obtain a tax identification number (TIN) to operate as the Finance Bill sent to the National Assembly by President Muhammadu Buhari is planning to make it mandatory.
This move, according to observers, is to expand the tax net of the country in the midst of shrinking revenue and make the Federal Inland Revenue Service (FIRS) pay tax to the government.
In his lead debate on Wednesday, the Senate Leader, Mr Yahaya Abdullahi, said the bill, when passed and signed, will make financial institutions request for TIN from customers for them to operate new and existing accounts.
“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,” he disclosed.
According to him, “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 lawmaker further said the bill intends to make it an offence to refuse to deduct tax.
“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 (CBN).
“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,” Mr Abdullahi stated.
He also said the bill made electronic mails as the only channel that tax authorities would accept as a formal means of correspondence with taxpayers and concerning the late filing of Value Added Tax (VAT), the fine has been raised 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 N50,000 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 subsequent month of default.
“This penalty also covers failure to notify FIRS of permanent cessation of trade or business.,” he said.
