Thank you for joining us. The focus for today's #PwCTaxChat is the 'Introduction of TIN as a precondition for opening/operating a bank account for business purposes
in Nigeria'.
in Nigeria'.
The Companies Income Tax (CITA) and the Personal Income Tax Act (PITA) do not require banks in Nigeria to collect a Tax Identification Number (TIN) from a customer before opening an account for business purposes. #PwCTaxChat
The Finance Bill 2019 now propose to amend CITA and PITA respectively. #PwCTaxChat
The amendments will mandate banks to request for TIN from companies and individuals that plan to open or are currently operating a bank account. #PwCTaxChat
For individuals, this applies to individuals opening or operating a bank account for business purposes. The amendment is expected to expand the tax net and improve collection by tax authorities. #PwCTaxChat
A TIN is a unique identification number given to registered taxpayers in Nigeria. Obtaining a TIN for a company involves submitting an application letter with the Federal Inland Revenue Service (FIRS), alongside certain documents. The entire process is free of charge. #PwCTaxChat
For companies, documents required to be submitted alongside the application letter include (1) completed taxpayer registration form; (2) completed taxpayer registration form VAT 001; (3) certificate of incorporation; and (4) Memorandum and Articles of Association. #PwCTaxChat
The Taxpayer registration form VAT 001 may become optional based on a new provision in the finance bill which includes VAT registration threshold of NGN25 million and above. #PwCTaxChat
For individuals in Lagos, a TIN will be created once a tax clearance certificate has been obtained. For individual outside Lagos, a TIN can be obtained after filing a Pay-As-You-Earn return and completing the required forms. #PwCTaxChat
In practice, banks already request for TIN from corporate customers but not from individuals who operate bank accounts for business purposes. #PwCTaxChat
Banks now need to update their account opening forms for individuals to also request for TIN where the account is for business purposes. Banks will also need to request for TINs from customers with existing business accounts where none had been provided. #PwCTaxChat
The Finance Bill does not provide for a grace period or phased adoption of the new requirement for TIN. Therefore, there is a chance that banks may decide to suspend business accounts without TIN once the Finance Bill is signed into law. #PwCTaxChat
To avoid this disruption to businesses, the JTB should provide guidance allowing banks a grace period to collect TINs on affected accounts. #PwCTaxChat
