TAX IDENTIFICATION NUMBER REGISTRATION IN NIGERIA
Upon incorporation of a company in Nigeria, the next mandatory step towards doing business in Nigeria is tax identification number registration. The procedure for how to obtain TIN in Nigeria has been simplified over the years by the FIRS. The body regulating tax administrations in Nigeria is the Joint Tax Board (JTB), while the regulatory agency in charge of issuing Tax Identification Number (TIN) and Tax Clearance Certificate (TCC) for companies is the Federal Inland Revenue Service (FIRS). There are laws and regulations backing the enforcement of tax, such as the Companies Income Tax (Amendment) Act 2020, Personal Income Tax Act 2011, Value Added Tax Act (Amendment) 2020 and other extant tax laws.
The State Inland Revenue Service is responsible for the Issuance of taxpayer ID and Tax clearance certificate to individual taxpayers. Each state in Nigeria has its internal revenue service, for instance, Lagos has its own Internal Revenue Service, which is the LIRS (Lagos State Internal Revenue Service)
It is important to state that an application for TIN precedes an application for a Tax Clearance Certificate, as the latter cannot be gotten without the former.
STEPS TO OBTAIN TIN (TAX IDENTIFICATION NUMBER)
Registration at the FIRS:
The first step to take is to obtain a Tax Identification Number (TIN), which is done by writing an application with the company’s letterhead to the FIRS. A TIN application may be done within six months of incorporating a company, but it is advisable such application is done immediately after the company’s registration, as most banks now require TIN for an opening of a bank account. The company is expected to apply for TIN at the FIRS office close to where the company is located. The TIN represents the identification number that the company would be identified in relation to the payment of all taxes to the federal government through the FIRS.
For companies, the audited financial statement, reflecting the output and input of the company’s transaction will be used to calculate the tax payable by the company subject to the computation of the officials in the FIRS office.
Documents For Processing of TIN
- A copy of the certificate of incorporation, copy of memorandum and articles of association as well as other incorporation documents are to be submitted at the FIRS for the processing of TIN.
- Completion of the tax registration form
STEPS FOR APPLYING FOR A TAX CLEARANCE CERTIFICATE
- The taxpayer is to fill the registration input form and submit to the FIRS branch
- Wait for FIRS assessment approval or rejection (at this stage, the assessment can be subject to additional assessment by the tax authority, as a result of any disagreement with items such as disallowed expenses in the financial statement
- Follow up at the FIRS office to confirm approval or issuance of the certificate
There has been an advanced shift in technology especially in the area of tax administration recently in Nigeria. Before, filling and application processes were not easily accessible by an applicant of TIN and Tax Clearance Certificate. Now the process of e- filing has been embraced to the point that companies and individuals can now access their status through the portal and other online activities.
To maintain a good tax policy and tax compliance measures with no detrimental effect, it will be appropriate and safer to consult an expert on tax administration who may be an accountant or a tax lawyer to monitor every related tax transactions of the company
The duties of the expert in the field of tax administration is to inform individuals or companies when they are due to pay tax, verify audited statement of account, monitor procedures and applications submitted to the tax regulatory authorities as well as ensuring that the company or individual they represent file their annual returns, within the specified date given by regulatory agencies.
By Corporate & Commercial Law Firm Team at Resolution Law Firm
Email: [email protected]