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Monday, 16 December 2013

TIN To Register Individuals In Their Offices By 2014

In an interview held in Lagos with National Project Manager for Tax Payers Identification Number (TIN), Mr. Oduba Oduba talked about the success of the project presently and its future plans.

What is Tax Identification Number (TIN) all about?

Oduba: The Tax Identification Number (TIN) is a project designed to capture and register electronically every taxable entity in Nigeria and issue a unique number to each entity. By taxable entity I am referring to individuals and corporate organizations i.e registered companies and enterprises. It is a nation-wide electronic database system for the registration and storage of data of taxpayers in Nigeria. The main purpose is to uniquely identify tax payers.

In the previous system, every number can only be used within a state; a company with multiple locations like banks with branches all over the country would require multiple numbers per state and have to keep track of each identification number. However, this new system is centralized. Whether you are doing business in Nigeria or a resident, once you are issued this number which is being anchored by Joint tax board JTB you don’t have to register again for the purposes of tax transaction even if you move from one state to another. You use the same number to transact taxation business. Essentially, this is designed to make life easier for both tax payers and tax authorities.


Question: What has been the compliance level since the commencement of TIN program and which sector of the economy has been most responsive to the new tax system?

Oduba:  I had earlier mentioned that purpose of project is to uniquely identify tax payer. Now, for corporate bodies the Federal Inland Revenue Service FIRS ordinarily register all corporate bodies and fortunately before this project the FIRS had already embarked on identifying corporate bodies and they have issued numbers to them. What we did was to convert the numbers to JTB numbers. Till date, we have captured database of about 500,000 corporate organizations and that to a large extent covers essentially most of the active businesses in Nigeria today.

Also, for the enterprises one of the factors that triggered that was that the Custom Service introduced electronic Form M as part of requirements for processing business at the port. This has encouraged many enterprises to register.  It is mandatory for businesses to process transactions at the Ports with a TIN and this has motivated active participation by companies in the new tax identification system. However, the scheme has not witnessed active participation from individuals, maybe because there’s nothing to use to drive that area for now. But we are putting strategy in place to encourage that group and scale up the reception and compliance. But for the corporate bodies and enterprises, it has been quite encouraging.


Question: What are the challenges against TIN system and what are you doing?


Oduba: one of the key things is that Individuals are not willing to register willingly. We’re working on attaching social services to the TIN system e.g. Driver’s license, International Passport etc. would soon require TIN registration.

Question: As the year rolls to an end, what is the agency’s outlook for 2014 concerning the TIN program?

Oduba: We are working on creating more awareness for the TIN system in 2014. We’re using the approach of taking the initiative directly to the tax payers. Instead of waiting for the people, we will create centres at various spots and markets to capture individuals enmasse and especially for companies with large number of employees. We are working on the schedule for that and in 2014 more of that will happen.

Question: How would you rate the level of acceptance of the program from the general public?

Oduba: General acceptance is still low for individuals but very okay for corporate organizations and enterprises.

Question: Penalties For Defaulting?


Oduba: For corporate bodies, soon it will be an offense to award contracts to an organization without TIN. In the regulation, we stipulate the penalty. It will be about 250, 000 and 5million. Social services will also be attached to compliance with TIN. These are some of the things we will bring to the table to encourage acceptance.

Question: How do you capture the ordinary trader who feels he has no business with government that will warrant him paying tax and thereby having a TIN?

Oduba: The TIN regulation will now make the TIN a prerequisite for the use of social services. For example, parents will be required to have a TIN to take advantage of free education for their children. Even if you are selling pepper, you will need to produce your TIN to allow your child go to school and benefit from many things among which is free education. Without TIN your child will not be accepted. We are identifying and collaborating with more agencies to help raise the awareness level and acceptance. This will make many people understand the project.

Question: Recent reports show that the Custom Service has fully integrated the TIN administrative system into their operation. What other agencies have you established such working relationship with and how is it helping to ensure compliance?

Oduba: We are aiming at a situation whereby if you want to register for TIN, the information already captured by the National ID will not be necessary. The CBN recently announced that for corporate bodies to open an account, it must have the TIN. Soon, this will extend to enterprises and individuals and everyone. We are having various discussions.  We are currently discussing with other agencies to integrate the TIN into their operations. For instance, the new Driver’s License has a space for the TIN. We are also collaborating with the National Identity Management Centre (NIMC) to integrate the processes and make it more smart, fast, efficient and attractive.

Question: The TIN initiative is a very commendable one, but one wonders if necessary infrastructure is in place to ensure a smooth operation.

Oduba: we have infrastructure in all the states of the federation. We have also trained personnel in all the states. However, unless a state contributes a counterpart fund, it cannot take part in the project.

Question: In the light of the level of fraud in the world, is it possible for a person to steal and use another person’s TIN for personal gains?

Oduba: We need to acknowledge that no system is completely foolproof. But the TIN system has no incentive to motivate fraudulent behavior. There is no monetary benefit attached to it.

Question: This program implies that government will have access to a large database of private and sometimes very sensitive personal information, how much is being done to protect data as well as the privacy of individuals and corporations?

Oduba: We have different category of users who can access the system.  Not every user will have access to all the information in the system. The level of authority will determine the information a personnel will have access to.

Question: TIN system has been around for some time now. In concrete terms, what has TIN achieved thus far?

Oduba: The electronic identification of tax payers has streamlined tax administration. The previous system was cumbersome. For example, a company needed different tax numbers whenever it relocated. We have 28 States of the federation already participating in the project and one will be signed shortly to make it 29 and still counting.

Question: Several sectors have complained about multiplicity of taxes, what has JTB done to stop States and Local Government from splitting various taxes as a way of raking in more revenues at the expense of the economic operators

Oduba: JTB is a policy board for creating uniformity in tax administration. The TIN will help to eliminate double taxation. States will be able to share information within the nation-wide database system.

Question:  What do you mean by tax payer?

Oduba: A tax payer is a person who should pay tax

Question: Why are some states not on the TIN project? What is their grouse?

Oduba: There are different reasons for the non-participation of the remaining states. Lagos State is concerned about how to integrate the TIN into their existing system. Discussion is ongoing in this regard. For Enugu and Ebonyi States, there are various levels of procedures to get approval. Nasarawa State is on the verge of joining the new system.

Question: There is an ongoing challenge between Lagos and Ogun States concerning the issue of where the state residents should pay their tax. How will the TIN help to resolve this challenge?

Oduba: Under the TIN system, taxpayers will be identified by their Local Government

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