Tax laws

Buhari toughens tax laws


There may be strict rules in how Nigerians operate bank accounts, starting next year.

The 2021 Finance Bill, an executive bill forwarded to the National Assembly by President Muhammadu Buhari, if enacted, will make the presentation of the Tax Identification Number (TIN) mandatory before the opening a bank account.

The President of the Senate, Ahmad Lawan, had informed his colleagues on Tuesday in plenary session, of the receipt of a letter from President Buhari dated December 7, 2021, requesting the approval of the Senate for the adoption of the bill.

In a main debate read in the Red Chamber on Wednesday on the finance bill by Senate Leader and Senator representing Kebbi North, Yahaya Abubakar Abdullahi and seen by Online forum, the bill revealed that “banks will be required to apply for a tax identification number (TIN) before opening personal bank accounts, while existing account holders must provide their TIN to continue managing their accounts ”.

Regarding value added tax (VAT), the bill proposed a fine of 50,000 naira at first instance for late filing of declarations and for default of payment.

“The penalty for late filing of VAT returns has been increased to N 50,000 for the first month and to N 25,000 for subsequent months of failure;

“The penalty for non-registration for VAT is increased to NGN 50,000 for the first month of default and NGN 25,000 for each subsequent month of default;

“The penalty for failing to notify the FIRS of the company’s change of address must be revised upwards to N 50,000 for the first month of default and to N 25,000 for each following month of default. This sanction also covers the failure to notify the FIRS of the definitive cessation of activity or activity.

A penalty is also proposed for operators responsible for collecting the tax but who have failed in their statutory functions.

“A non-tax deduction penalty will also apply to agents appointed for tax deduction. This penalty is 10 percent of the undeducted tax, plus interest at the prevailing monetary policy rate of the Central Bank of Nigeria. There is encouraging news for retirees as the proposed bill “seeks to remove the tax exemption on withdrawals from pension plans, unless prescribed conditions are met; The child allowance (2,500 per child up to a maximum of 4) and the dependency allowance (2,000 per dependent for a maximum of 2) should be abolished. “

President Buhari is also anxious to remove all conditions attached to the tax exemption on tips and to make it tax-exempt in the long term.

Senator Abdullahi revealed that the motive of the bill was to reduce budget deficits, through clarity of reforms and policy execution.

“The bill pursues the following strategic objectives: Promote tax fairness; Reform national tax laws to align them with global best practices; introduce tax incentives for investments in infrastructure and capital markets; and
Support medium and small businesses and increase government revenues. “

The Senate curiously relaxed some of its rules as the bill staggered first and second readings on Wednesday.

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2021 finance bill: Buhari toughens tax laws