The proposed Financial Bill 2021 makes Tax Identification Number mandatory for anyone who wishes to open an account with any commercial bank in Nigeria. Existing account holders would also be required to provide their TIN before they are allowed to continue to operate their accounts. This was disclosed by the Senate Leader, Yahaya Abdullahi, during his lead debate on the bill.
Abdullahi said that the bill specifies electronic mails the only channel that tax authorities would accept as a formal means of correspondence with taxpayers.
He added that the proposed bill prescribes penalty for failure to deduct tax and sanctions would also apply to agents appointed for tax deduction. The penalty would be 10 per cent of the tax not deducted, plus interest at the prevailing monetary policy rate of the Central Bank of Nigeria (CBN).
Penalty for late filing of VAT returns has increased to N50,000 for the first month and N25,000 for subsequent months of failure.
“The penalty for failure to register for VAT is reviewed upwards to NGN 50,000 for the first month of default and NGN 25,000 for each subsequent month of default;
“The penalty for failure to notify Federal Inland Revenue Service (FIRS) of change in company’s 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.”
The conditions attached to tax exemption on gratuities have been removed therefore, gratuities are unconditional tax exempt.
Many of the changes in the Financial Bill are expected to have positive impact on investments and ease the process of tax payment especially for MSMEs.
Also, 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.
