Finance Bill To Make TIN Compulsory For All Bank Accounts Holders - THE DAILY CRUCIBLE

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Wednesday, December 8, 2021

Finance Bill To Make TIN Compulsory For All Bank Accounts Holders




The Daily Crucible | Published Wednesday, December 8, 2021

By Jane Okafor, Abuja

The Finance Bill 2021 National Assembly when passed and signed into law, will make it mandatory for commercial banks to demand Tax Identification Numbers from anyone desirous of operating an account with them.

The Bill also empowers banks to demand TIN from existing account holders if they so wish to keep running their accounts.

This was the position of Leader of the Senate, Yahaya Abdullahi, on Wednesday in his lead debate on the finance bill, sent a day earlier to the National Assembly by President Muhammadu Buhari.

He said: “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.”

According to him, the bill makes electronic mails the only channel through which tax authorities will accept as a formal means of correspondence with taxpayers;

He said the proposed bill prescribes penalty for failure to deduct tax, adding that it would also apply to agents appointed for tax deduction.

Abdullahi said: “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.”

Continuing, leader of the Senate said penalty for late filing of Value Added Tax  returns increased to N50, 000 for the first month and N25, 000 for subsequent months of failure.

On the Personal Income tax Act, he noted that amendment clarified that pension contributions no longer require the approval of the Joint Tax Board to be tax-deductible.

He said: “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 subsequent month 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 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.

“On the other hand, the bill seeks to remove the tax exemption on withdrawals from pension schemes except the prescribed conditions are met."



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