WHY ACQUIRING TAX IDENTIFICATION NUMBER IS ESSENTIAL
Taxpayer Identification Number or TIN is the registration number assigned to business enterprises and organizations.
WHY ACQUIRING TAX IDENTIFICATION NUMBER IS ESSENTIAL
Taxpayer Identification Number or TIN is the registration number assigned to business enterprises and organizations. It is a fourteen digit number to be quoted in all tax and business related transactions and for its further correspondence. Tax Identification Number is necessary for all organizations and business entities who have registered under Value Added Tax for conducting business, that is the sale of goods and services. Basically, if they are liable to pay tax and have exceeded the specified threshold limits, they have to apply for a VAT registration, and then they will be given a Tax Identification Number. It is mandatory for manufacturers, dealers, exporters, traders to have a Tax Identification Number.
Tax assessments, collections, and accounting for any income due to the Nigerian government fall under the purview of the FIRS. Therefore, it is a legal requirement for all Nigerian citizens and businesses who engage in the sale of goods or services, employment with the government, other public bodies, the private sector, or independent contracting to possess a Taxpayer Identification Number.
Taxpayer identification number (TIN) is a unique number issued to a business or individual for tax purposes. After a new business registers with the Corporate Affairs Commission, the regulatory authority will generate TIN on the portal. A taxpayer can also verify TIN details and print a TIN certificate from the TIN Verification Portal. Section 3 of the Finance Act 2019 replaced the provisions of Section 10 of the Companies Income Tax Act (CITA). As a result, TIN is now compulsory for all businesses. The Federal Inland Revenue Service (FIRS) public notice also highlights the mandatory use of taxpayer identification number (TIN).
Going forward, every company must display its TIN on all business transactions with other businesses and individuals as well as on all documents and correspondence with revenue authorities. Companies must also provide their TIN on all correspondence with Ministries and Government agencies. Banks or other financial institutions in Nigeria must collect the TIN from all companies that want to open or continue to operate a corporate bank account.
Section 28 of the Finance Act further introduced a provision in Section 49(1) of the Personal Income Tax Act (PITA). Similar to the mandatory TIN for companies, the Finance Act also states a new TIN requirement for individuals. Banks or other financial institutions in Nigeria must collect TIN from individuals who want to open or continue to operate a bank account for business purposes. The emphasis here is on persons that intend to use a bank account for business purposes.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080