Presidency denies TIN requirement to operate a bank account
… Speaker says Bill will check public borrowing
… FIRS generates N5 trillion from this year
A source at the presidency has disclosed that there is no provision in the 2022 Finance Bill before the National Assembly that requires Nigerians to have a tax identification number (TIN) to operate bank accounts.
Reports citing the bill had claimed that there is a provision in the proposed legislation that mandates banks to “request for TIN before opening bank accounts for individuals while existing account holders must provide their TIN to continue operating their accounts”.
The Presidency source involved in the drafting of the bill said the news reports were “totally inaccurate, as the bill has no such provisions for individuals”.
According to the document seen by The Guardian, the main changes proposed under the bill, which would be further defended this week, at both the Senate and the House of Representatives 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 procedure is reinvested in the shares of any Nigerian company within the same year of assessment.
It also requires lottery and gaming businesses to be specifically taxable under the Company Income Tax Act (CITA). This will apply to betting, the game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo and slot or gaming machines.
The document says companies engaged in petroleum operations including midstream and downstream operations will 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.
It empowers the Federal Inland Revenue Service (FIRS) to assess company income tax (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 the minimum tax rate from 0.5 per cent to 0.25 per cent of turnover (the less franked investment income) is to be applicable to any two accounting periods between 1 Jan 2019 and 31 Dec 2021 as may be chosen by the taxpayer. Disputed tax assessment to 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,” the document reads.
Meanwhile, the Speaker of the House of Representatives, Femi Gbajabiamila, has said that the Bill seeks to introduce strategic and positive reforms that would engender best practices and statutorily check borrowing by local, state and federal government.
According to Gbajabiamila, the Bill also aims at enhancing transparency and accountability in the administration of taxes and public revenue generation while at the same time guaranteeing the interest of the investing public and businesses.
He spoke yesterday at the stakeholders’ forum organised by the House Committee on Finance in Abuja.
“It is instructive to state that the essence of the 2021 bill is to further reposition our finance system to plug wastes, close openings for corruption, create employment opportunities as well as stimulate stability and growth in our productive sectors, within the wider context of our quest for economic recovery in our country.
“Given the democratic credentials of the house of representatives under my watch as well as the need to further deepen the credibility of the process through wider participation of stakeholders, this stakeholders meeting has been designed to give Nigerians and critical stakeholders in the industry the ample opportunity to own and drive the process,” the Speaker said.
This comes from the FIRS said it has collected over N5 trillion from January to date. The revenue agency also said it was confident that it would achieve its value-added tax (VAT) target for the year. The Service’s target for 2021 is N5.9 trillion, N1 trillion over the N4.9 trillion it recorded last year.
The Executive Chairman of FIRS, Muhammad Nami, disclosed this to journalists after a stakeholder engagement on the Finance Bill 2022 in Abuja yesterday.
Nami attributed the successes recorded by FIRS in recent times to the annual review of the Finance Act, which he said has allowed the Federal Government to enhance domestic revenue mobilisation and improve tax administration.