Experts said that making sure every account holder has a tax ID number doesn’t mean everyone is required to pay taxes, as there is an exemption for anyone earning less than $ 30,000. NOT.
They added that there would be a reduction in tax avoidance because the government would have a tax footprint on everyone.
The punch reported that Senate Majority Leader Yahaya Abdullahi said on Wednesday that the 2022 finance bill that had been sent to the president, Major General Muhammadu Buhari (retired), would force commercial banks to demand a tax identification number for anyone wishing to open an account with them.
Taiwo Oyedele, Tax Policy Partner and Head of Tax Africa at PwC, said that although there does not appear to be such a provision in the new 2021 budget bill making the TIN mandatory for holders On the whole, it could affect financial inclusion if the narrative surrounding it was not handled well.
He said: âThere is nothing in the new finance bill that is before the National Assembly about the NIF. I know that the names of bills can be confusing. The bill called the 2021 finance bill is the bill that comes into force in 2022. Thus, the finance bill that we are now using in 2021 was drafted in 2020. It is the one that has the NIF, not the 2021 finance bill.
âHowever, before the bill, the VAT required the TIN from companies. The additional provision concerned individuals. For individuals, I’m not sure if this is fully implemented, but the reality is that you can’t have a bank account without BVN, and if you have BVN, you’re just one click away from the TIN. So, I think no one can hide from the tax authorities by not having a TIN.
âIf perception isn’t well managed, it can discourage people from opening bank accounts, and this can affect financial inclusion. In fact, it may even affect the uptake of the new e-Naira. People can just assume that this is all about tax collection. The government therefore has a responsibility to ensure the right story. ”
He further underlined the need for an appropriate tax system, which would prevent tax evasion and illicit financial flows.
âA good tax system is actually good for everyone. It doesn’t mean you have to pay taxes. Part of what we’re trying to get the government to do is raise the exemption threshold.
âThey moved it to 30,000 N last year, which is progress. Hopefully we’ll be able to move it up to maybe 100,000N. But even if you’re exempt, you still have to be in the system so that we have your data. So that’s an impact that I hope to see. ”
A tax specialist at KPMG, Victor Onyenkpa, also highlighted the essence of the TIN, saying it would provide a tax signature for everyone, which would help to effectively manage the tax process in the country.
He said: âThis will give each account operator a tax footprint because if you have a TIN and it’s linked to your bank account, that means you need to register with a tax authority. Once you are registered with a tax authority, it is easy to keep track of whether you are subject to tax and whether you are paying the appropriate tax that you owe.
“Obviously there will be people like the students, who will not pay taxes, but we will also know their student status.”
However, a former president of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said the law was intended to make those who earn income pay taxes.
He observed that many companies made huge income but did not pay taxes.
The law, he noted, would increase government revenue as more people would be drawn into the tax net.
However, he stressed the need to ensure the judicious use of taxes because people did not see what the taxes were for.
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