*Buhari Goes Tough On Tax Laws
*Says no Bank account without TIN
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There may be stringent rules in the operation of bank account by Nigerians, effective from next year.
The Finance Bill 2021, an Executive Bill sent to the National Assembly by President Muhammadu Buhari, if passed into law will make the presentation of Tax Identification Number (TIN) compulsory before opening a bank account.
President of the Senate, Ahmad Lawan, had during plenary on Tuesday informed his colleagues, the receipt of a letter from President Buhari dated December 7, 2021, seeking the approval of the Senate for passage of the bill into law.
In a lead debate read on the floor of the Red Chamber, on Wednesday, on the Finance Bill by Senate Leader and Senator representing Kebbi North, Yahaya Abubakar Abdullahi and sighted, the Bill disclosed that “Banks will be required to request for Tax Identification Number (TIN) before opening bank accounts for individuals while existing account holders must provide their TIN to continue operating their accounts.”
On Value Added Tax, (VAT) the Bill proposed a fine of N50,000 at first instance for late filing of returns and for default.
“Penalty for VAT late filing of returns 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 FIRS of change in company 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.”
There is also a proposed penalty for operators saddled with the responsibility to collect tax but defaulted in their statutory functions.
“Penalty for failure to deduct tax will also apply to agents appointed for a tax deduction. This penalty is 10 per cent of the tax not deducted, plus interest at the prevailing monetary policy rate of the Central Bank of Nigeria.” There is cheering news for pensioners as the proposed “Bill seeks to remove the tax exemption on withdrawals from pension schemes except the prescribed conditions are met; Child relief (2,500 per child up to a maximum of 4) and dependent relief (2,000 per dependent for a maximum of 2) are to be deleted.”
President Buhari is also anxious to remove all conditions attached to tax exemption on gratuities and ultimately make it tax-exempt.
Senator Abdullahi disclosed that the motive of the Bill was to reduce budget deficits, through clarity in policy reforms and execution.
“The Bill has the following strategic objectives: Promoting fiscal equity; Reforming domestic tax laws to align with global best practices; introducing tax incentives for investments in infrastructure and capital markets; and Supporting Medium and Small Scale Enterprises and raising revenues for the government. ”
The Senate curiously relaxed some of its rules as the Bill scaled First and Second Readings on Wednesday.
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