Experts have said making every account holder possess a Tax Identification Number does not mean everyone is required to pay tax, as there is an exemption to anyone earning below N30,000.
They added that there would be a reduction in tax avoidance, as the government would have a tax footprint of everyone.
The PUNCH had reported that Senate Majority Leader, Yahaya Abdullahi, had on Wednesday stated that the 2022 Finance Bill which had been sent to the President, Major General Muhammadu Buhari (retd.), would make it mandatory for commercial banks to demand Tax Identification Number from any individual seeking to open an account with them.
Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, said although there seemed to be no such provision in the new 2021 Finance Bill mandating TIN for account holders, it might affect financial inclusion if the narrative around it was not well-managed.
He said, “There is nothing in the new finance bill that is before the National Assembly about TIN. I know the naming of bills can be confusing. The bill called the 2021 Finance Bill is the bill that takes effect in 2022. So, the finance bill that we are using now in 2021 was done in 2020. That was the one that has TIN, not the 2021 Finance Bill.
“However, before the bill, VAT has been asking for TIN from companies. The additional provision was for individuals. For individuals, I don’t know if that is fully implemented but the reality is you can’t have a bank account without BVN, and if you have BVN, you are just one click away from the TIN. So, I don’t think anyone can hide from the tax man by not having TIN.
“If the perception is not managed well, it can discourage people from opening bank accounts, and this can affect financial inclusion. In fact, it can even affect the new e-Naira adoption. People may just assume that all of this is about collecting taxes. So, the government has a responsibility to ensure the right narrative.”
He further stressed the need for a proper tax system, which would hinder tax avoidance and illicit financial flows.
“A proper tax system is actually good for everyone. It does not mean that you have to pay tax. Part of what we are trying to get the government to do is to increase the exemption threshold.
“They moved it to N30,000 last year, which is progress. Hopefully, we will get to a point of moving it to maybe N100,000. But even if you are exempted, you still need to be within the system so we have your data. So, that is one impact I am hoping to see.”
A tax expert at KPMG, Victor Onyenkpa, also emphasised the essence of TIN, stating that it would provide a tax signature for everyone, which would help to effectively manage the tax process in the country.
He said, “It will give every account operator a tax footprint because if you have a TIN and it is linked to your bank account, it means you have to register with a tax authority. Once you are registered with a tax authority, it is easy to track you from the point of view of whether you are liable to tax and whether you are paying the appropriate tax that you should pay.
“Obviously, there will be people like students, who will not be paying taxes, but we will also know their status as students.”
However, a former President, Association of the National Accountants of Nigeria, Dr Sam Nzekwe, said the law was aimed at making those earning income to pay taxes.
He observed that many businesses were making huge revenue but not paying taxes.
The law, he noted, would boost government revenue as more people would be drawn into the tax net.
He however stressed the need to ensure judicious use of the taxes because people were not seeing what the taxes were being used for.