No TIN Requirement to Operate Bank Account in Finance Bill 2021, Says Presidency

There are no provisions in the Finance Bill 2021 now before the National Assembly forcing Nigerians to have a Tax Identification number in order to operate a bank account, a presidency source clarified yesterday.

News reports erroneously citing the bill had claimed that there is a provision in the bill that, “banks will be required to request for TIN before opening bank accounts for individuals while existing account holders must provide their TIN to continue operating their accounts.”

But the Presidency source who was involved in the drafting of the bill said the news reports was “totally inaccurate, the bill has no such provisions for individuals.”

However the source listed the main changes proposed under the bill which would be further defended this week at both the Senate and the House of Representatives to include capital gains tax at the rate of five per cent to be applicable on disposal of shares in a Nigerian company worth N500 million or more in any 12 consecutive months except where the proceed was reinvested in the shares of any Nigerian company within the same year of assessment.

It also stated that partial reinvestment would attract tax proportionately. Transfer of shares under the regulated Security Lending Transaction is exempted.
Also, the proposed legislation states that lottery and gaming business to be specifically taxable under CITA including betting, game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machines and the likes.

In addition, it states that companies engaged in petroleum operations including Midstream and Downstream operations would not be eligible for exemption on profits in respect of goods exported from Nigeria.
“Downstream companies were previously eligible under the old Upstream and Downstream classification.
“FIRS to be empowered to assess CIT on the turnover of a foreign digital company involved in transmitting, emitting, or receiving signals, sounds, messages, images or data of any kind including e-commerce, app stores, and online adverts.

“Capital allowance claimable on an asset is limited to the portion used for generating taxable profits. Assets partially used to generate taxable income will be eligible for pro-rata capital allowance except where the proportion of non-taxable income does not exceed 20 per cent of the total income of the company.

“Any capital allowance or unabsorbed allowances brought forward by a small or medium company, other than a company under pioneer status, to be treated as having been claimed and consumed in each such year of assessment.
“The reduction of minimum tax rate from 0.5% to 0.25% of turnover (less franked investment income) is to be applicable to any two accounting periods between 1 Jan 2019 and 31 December 2021, as may be chosen by the taxpayer.” Itt further stated.

According to the proposed legislation, disputed tax assessment are be in abeyance until determination while undisputed tax assessment is to be paid within 30 days after service of the notice of assessment on the company except otherwise extended by the FIRS. “Reference to provisional tax has been deleted in recognition of the well-established self-assessment tax regime. Withholding tax on interest earned from a unit trust to be treated as final tax. Only WHT on dividend is currently treated as final tax for local companies.

“The deployment of technology to automate tax administration including assessment and information gathering by FIRS to now include third party technology (previously only proprietary technology may be deployed).
“A penalty of N50,000 to be applicable where a company fails to grant access to FIRS in addition to N25,000 for each day the failure continues,” it added.