Taxes & Tariffs | |
Taxes & Tariffs | |
30449 VIEWS | |
![]() |
Monday, December 02, 2019 / 06:21 PM / by Yinka Ogunnubi* / Header Image
Credit: JOOVS
The Finance
Bill currently passed by NASS amends sections 33, 49 & 58 of the Personal
Income Tax Act. Specifically,
these amendments cover the deletion of provisions that grants certain personal
reliefs and also the deductibility of Pension contributions.
The
amendment of the PITA that appears to have caught the interest of many is the
provision that henceforth, individuals would be required to produce their Tax
Identification Numbers (TINs) before they can operate new or existing bank accounts
in Nigeria.
According
to the Minister of Finance Mrs Zainab Ahmed, the bill when signed into law will
take effect from the 2nd of Jan 2020.
This
means that there is the likelihood that banks will start
asking customers to provide their TIN from that date. This has the potential of
disrupting the normal flow of business activities as we can imagine that bank
ATM cards of those who have not compiled will not work and withdrawals or deposits
can't be made. In other not to shut down the system, there's likely to be a
grace period that will be given to allow individuals to obtain the TIN. How
long this "Grace Period" would be is any one's guess. But if
you have a bank account, it is important that you pay attention and ensure you
are ready and not caught off-guard. It must however be stated that this will
not be an issue for Corporate Accounts because the provision of TIN is already
a mandatory requirement for operating Corporate Accounts.
Employees
and Consultants
If you
are an employee of an organization that remits PAYE, then it means you already
have some form of tax identification from the State Internal Revenue Service.
My expectation is that this should suffice in the interim pending effort by the
JTB to harmonize tax ID numbers.
If you
are a consultant and you have done business with government or any organization
where WHT was deducted, then it means you must have at some point provided a
TIN because the system now is automated. Make efforts to verify your number to
be sure it is still valid.
Others
(Unemployed, Student, etc)
If
however you are not in any of these categories or maybe you are a student,
self-employed or live in the diaspora, you will still be required to obtain a
TIN. The TIN only confirms that you are a registered tax payer in Nigeria, it
is not a deduction of tax from source nor does it confer on you any
accreditation that you have paid your tax.
How to
obtain your individual TIN
According
to the Joint Tax Board, Individuals are automatically assigned
with a TIN based on their BVN (Bank Verification Number) or NIN (National
Identity Number). This presupposes that before you can have a TIN, you must be
enrolled in BVN and the NIN. Thus if you already have a BVN or a NIN, you are
likely to have been assigned a TIN.
To verify
and confirm this, you can verify your TIN . This is a very
important point to note.
I tried
searching the JTB site using my BVN, NIN and registered Phone Number and it came
back with no record. What this means is that there is the potential for
problems associated with the system which needs to be tidied up before this
section of the bill takes effect.
That
said, many have confirmed that indeed the system works as they have been able
to retrieve their TIN by using the search criteria on the site.
To
summarize this article, it is important to note the following:
1.
TIN
Registration is Free. No one should compel you to pay for it.
2. TIN
is a requirement of every taxable individual in Nigeria. A taxable individual
is anyone that earns an income and/or is paid an income by an organization
irrespective of age. This includes foreigners working in Nigeria as well
3. TIN
doesn't take away your tax relief or exemptions. It is just a confirmation of
registration of the individual for tax purposes.
4. TIN
is now a statutory requirement for the opening, maintenance and operation of
bank accounts in Nigeria.
5. Get your TIN number and validate it on the FIRS website.
My
expectation is that between now and whenever the law comes into effect, all
efforts would be on to ensure a seamless process of obtaining and verifying TIN
for individuals. If someone has already enrolled into the BVN and has a NIN,
then the TIN should be automatic.
About The Author
Yinka Ogunnubi is an author, economist and a finance
professional with extensive experience in corporate treasury and finance; who
has developed interest over time in personal finance for application in the
home and personal life. He can be
reached via @yinkanubi
Previous Articles by The Author
1.
How Not To Major in Minor - Key Issues Arising
From Recent Cashless Directive
2. A Fool's Guide To
Innoson Vs Customs and GTBank
3. Towards A Functional
Nigerian Port System - Beyond Ease of Doing Business Executive Order
4. How To Make Housing
Unaffordable: Pass A National Housing Fund Act Without Amending The Land Use Act
5. Shared Experiences -
Achieving Financial Inclusion By Building On Existing Models Like A Cooperative
6.
Related to Finance Bill
Related to Personal Taxes
Related News - Taxes & Tariffs