This announcement, made by the Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji, serves to clarify widespread confusion and concerns that arose from recent initiatives to integrate bank accounts with the national tax database.
The clarification became necessary after the FIRS, in collaboration with the Central Bank of Nigeria (CBN), began a push to deepen tax compliance and identify individuals with significant financial transactions who are not yet in the tax net. This led many financial institutions to aggressively demand TIN from all customers for any banking activity, causing inconvenience for low-income earners and those in the informal sector.
The government has now drawn a clear distinction between ordinary citizens and high-net-worth individuals.
Who Needs a TIN to Bank?
According to the FIRS chairman, the mandatory requirement for a TIN is targeted at a specific segment of the population. The following individuals must provide their TIN for their banking operations:
* High-Net-Worth Individuals: People with significant financial deposits and transactions running into millions of naira.
* Business Owners: Owners of corporate accounts and enterprises.
* Individuals Conducting Large Transactions: Any person conducting transactions of a volume and frequency that is typical of a business or a high-income earner.
For this group, providing a TIN is mandatory. The FIRS intends to use this data to ensure that those who are economically able are complying with their tax obligations.
For the ordinary Nigerian including students, low-income earners, petty traders, farmers, and others in the informal sector the rule does not apply. They can continue to open and operate their "Tier 1" bank accounts.
Tier 1 accounts are the most basic account type in Nigeria's tiered Know Your Customer (KYC) framework. They can be opened with minimal documentation, typically just a full name, phone number, and a valid means of identification (like a National ID card, Voter's Card, or Driver's License). These accounts have transaction and balance limits, making them suitable for everyday use by the masses.
Mr. Adedeji emphasized that the government's policy is not to stifle financial inclusion but to strengthen it while ensuring an equitable tax system.
We are not targeting the poor masses. Our focus is on the elites who are evading tax,” the FIRS chairman stated. The whole idea is to make it easy for the average Nigerian to be part of the financial system without undue hurdles, while using technology and data to identify those who should be paying taxes and are not.
The initial push for TIN integration was part of the government's broader strategy to widen the tax net and increase revenue without raising tax rates. Banks, aiming to comply with directives to collect TINs, often applied the requirement broadly to all customers to avoid regulatory sanctions, leading to the confusion.
This latest directive serves to refine that strategy, protecting the banking access of ordinary Nigerians while focusing enforcement efforts on the intended targets.
If you are an ordinary citizen with a basic savings account (Tier 1), you do not need to worry about providing a TIN to access your account.
If you are a business owner or conduct large-volume transactions, you will be required to provide your TIN to your bank.
If you fall into the latter category and do not have a TIN, you are encouraged to register for one with the FIRS, a process that is free and can often be initiated online.
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