Nigerian Tax Authorities Extracting NIN information for Tax Purposes

Nigerian Tax Authorities Extracting NIN information for Tax Purposes

Nigerian Tax Authorities Extracting NIN information for Tax Purposes

Nigeria is leveraging on Taxpayers’ information contained in the National Identification Number (NIN) to gather tax related information about the taxpayer.

Recently, the West African country made it mandatory for all phone users to update their Identification information with the country’s National Identity Management Commission (NIMC).

More than a 60% of the country’s 200 million population are expected to submit their personal information to the NIMC, out of which about 60 million persons have updated their NIN.

Consequently, tax authorities headed by the Executive Chairman of the Federal Inland Revenue (FIRS), Muhammad Nami, are making efforts to extract the NIN information for the purpose of tax administration.

Nami, who is the Chairman of the Joint Tax Board (JTB) said on Thursday, that the board is considering the National Identification Number (NIN) for Tax Initiative, to boost internally Generated Revenue (IGR) in the country.

Nami said at the opening of the 147th meeting of the JTB in Kaduna, that the move would ensure synergy in the tax administration system.

He said that the NIN database would provide the most robust, accurate and comprehensive database of current, potential, and future taxpayers in the country. “We must, therefore, think of how best to explore this unique opportunity to ramp up taxpayer registration, validation of taxpayer identification, collection of data, profiling and analysing data collected.

This will ensure that every citizen and other taxable persons in the country are compelled to declare and pay their taxes honestly as provided under Section 24 of the 1999 Constitution of the Federal Republic of Nigeria, as amended.

“By linking NIN to all key economic activities of individuals and businesses, this initiative will provide reliable, easy to access information to determine the correctness of the information declared for tax purposes by all taxpayers.

“It is also expected to streamline various regulatory processes for businesses and individuals leading to increased administrative efficiency and ease of doing business,” he said.

Nami stressed that the initiative, if properly implemented, was capable of expanding Nigeria’s tax net to cover at least 90 per cent of all eligible taxable persons against the estimated less than 30 per cent captured so far.

He added that the initiative also has the prospect of increasing the country’s tax contribution to GDP ratio from the current six per cent to about 20 per cent over the next five years.

The chairman said that as custodian of the Nigerian tax system, tax administrators have the responsibility of implementing all tax policies and laws and ensuring equity and optimal benefit to the nation.

Nami said that tax administrators were faced with the daunting challenge of finding innovative and effective ways of preventing, detecting and remediating tax evasion, illicit financial flows and loopholes that facilitate aggressive tax avoidance.

According to him, to deliver the mandate of revenue generation, tax administrators must be innovative and employ the use of technology and tax intelligence to counter the alarming trend of tax evasion.

“It has been demonstrated worldwide that access to data and intelligence to determine accuracy of taxpayer information is key towards driving voluntary compliance and minimising tax evasion.

“So far, no country has been able to achieve a high level of tax compliance without having a robust system of personal identification.”

In a keynote address, Gov. Nasir El-Rufai, noted that only those in the formal sector pay tax, while many rich and high-profile Nigerians do not pay tax.

El-Rufai said that this could change if NIN would be linked with the banking and tax system to expose bank account details of high-profile citizens.

He said that the future of Nigeria will no longer depend on oil, but on every citizen of the country if everyone would see the need to pay tax.

He advised the JTB to deepen the deployment of technology to generate and collect tax and consider linking NIN to bank accounts of citizens.

“You should also consider moving away from income tax to consumption tax, because with consumption tax, it will be difficult to avoid paying tax except if people will stop spending,” a local newspaper quoted the governor.