The Nigerian government launched a new Tax Identification Number (TIN) Registration system in July 2019 as part of efforts to reform tax administration and make it easy for more people to pay tax in Nigeria using digital technology.
The Joint Tax Board (JTB), at its 135th meeting held on 25 and 26 July 2016 made several resolutions aimed at boosting Internally Generated Revenue (IGR) at various levels of government. One of them was the TIN registration system.
The new tax registration system is one of a two-phased project that includes Implementation of a Unified Tax Identification Number (UTIN) and Integrated Tax Administration System (ITAS) at the Federal Inland Revenue Service (FIRS).
During the launch in July, Vice President Yemi Osinbajo explained that the system was introduced to help tax-payers and other stakeholders easily verify their TIN online. The service also enables tax-payers to print their TIN certificate or send it to their emails. Importantly, it is expected to help grow the number of Nigerian tax-payers to 45 million by the third quarter of 2019.
BusinessDay reached out to FIRS to confirm whether the target was met in September. The revenue collector is yet to respond to questions as of the time of publishing this article.
Nigeria currently has a tax base of 20 million.
How it affects you
The TIN registration system is among the tax reforms presented in the Finance Bill by the Ministry of Finance. The Finance Bill which was passed by the National Assembly amends sections 33, 49, and 58 of the Personal Income Tax Act. Consequently, individuals are required to produce their TIN before they can operate new or existing bank accounts in Nigeria.
However, this provision is mainly for corporate customers. Banks would be required to obtain TIN from corporate customers as a pre-condition for opening or maintaining bank accounts. While this is the practice, the amendment gives a legal basis to the practice.
For individuals, two of the resolutions reached by the JTB at the meeting in July is empowering Nigeria Immigration Service to make it mandatory for the presentation of Tax Clearance Certificate (TCC) for issuance of immigration facilities. Issuing or renewal of international passports, for instance, would require the presentation of the TCC.
Secondly, the JTB resolved that the Federal Road Safety Corps (FRSC), Vehicles Inspection Officers (VIOs) and other agencies would enforce the presentation of Taxpayer Identification Number (TIN) as a requirement for the resolution of a road traffic offence.
Given the development, the FIRS is collaborating with the state internal revenue services to make the presentation of TCC a requirement for processing of drivers’ license and number plates.
The Lagos State Internal Revenue Service (LIRS) is among the first states in the country to indicate that it intends to integrate the existing Taxpayers Identification Digit (PID) into the nationwide TIN system with the JTB. The state revenue service plans to use the existing Bank Verification Number (BVN) operations to achieve its objective. In other words, access to LIRS electronic platform for all transactions, such as registration and creation of Payer ID for new taxpayers, payment of taxes and validation of taxpayers’ profile will compulsorily require BVN validation.
Hence, every self-employed individual in the state is expected to provide their BVN to the LIRS for the creation of their unique PID, while corporate organisations are to ensure that their employees provide their BVNs for processing of their tax clearance certificates (TCCs).