New Bill Mandates Tax ID For Opening Bank Accounts

A new legislative proposal in Nigeria mandates that individuals involved in banking, insurance, stock-broking, and other financial services must present a Tax Identification Number (TIN) to open new accounts or maintain existing ones.

The bill, formally 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,” aims to strengthen tax compliance and enhance revenue collection across the country.

Dated October 4, 2024, and sourced from the National Assembly, the legislation stipulates, “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 is part of broader efforts to ensure that all individuals and entities involved in financial activities are properly registered for tax purposes.

Furthermore, the bill specifies that non-resident individuals supplying taxable goods or services in Nigeria, or earning income from the country, must also register for tax purposes and obtain a Tax ID. However, non-residents receiving only passive income from investments in Nigeria will be exempt from registration but must still provide necessary information as required by tax authorities.

Additionally, the proposed legislation grants tax authorities the power to automatically register individuals who fail to apply for a Tax ID when required. In these cases, the tax authority must promptly inform the individual of their registration and the issuance of their tax ID.