How to Obtain a Tax Identification Number (TIN)

Everyone has a civic duty to remit taxes to the government, covering various types such as personal income tax, capital gains tax, value-added tax (VAT), companies' income tax, and property tax.

As a result, having a tax identification number (TIN) is crucial for tax remittance. To enhance tax revenue, the Finance Act of 2020 requires every individual to register for and obtain their TIN, as those without registration may be prevented from operating a bank account for business purposes.

This article will outline the steps required to obtain a TIN.

What is TIN?

The TIN is a 14-digit unique number generated as part of tax registration and is used to identify taxpayers for tax remittance. It is free and can be obtained from any Federal Inland Revenue Service (FIRS) office. It is used by the taxpayer alone and it is necessary for every person required by law to pay taxes in Nigeria.

Who Needs to Obtain a TIN?

Tax payment is mandatory for all individuals and businesses, which means that individuals, companies, business names, and incorporated trustees are mandated by law to obtain a TIN.

Every company or business must obtain a TIN, regardless of whether they are profitable.

Taxes are calculated based on a company's net profit. If a business does not make a profit in a given accounting year, it may not be required to pay taxes. However, having a TIN is still a mandatory requirement. Hence, while charitable organizations such as incorporated trustees are not required to pay taxes, they are required to obtain TIN.

Why is Having a TIN Necessary?

Beyond the legal obligation for a TIN, here are additional reasons why it is important to have one:

1. To open a business bank account

The TIN is necessary for opening and maintaining business accounts at Nigerian banks. This implies that a person can not open or operate a corporate account without their TIN. Therefore, the applicant must first register and obtain a TIN before opening or operating a business account.

2. For capital importation into a foreign country

For a company or business to invest or buy shares in a foreign country, that business is required to import capital into that foreign country. In any case, the TIN is usually required to import capital to another country.

3. To apply for a government loan

To obtain a government loan, the applicant must show their TIN.

4. To obtain a tax clearance certification

A tax clearance certificate is written evidence that confirms that a person's taxes have been paid in full. It is used to obtain loans from banks, register real property at the Lands Registry, contest for public offices, and so on. Conversely, a tax clearance can not be issued to an unregistered person.

Procedure for Obtaining TIN

Upon registration and commencement of business, the next thing to be done is to apply for TIN and VAT registration.

VAT registration is required for businesses that charge VAT. Companies generating an annual turnover of N25 million or more must enroll for VAT through the FIRS. The relevant business must obtain a TIN and provide relevant information, including the company's Memorandum and Articles of Association and requisite corporate forms.

Step one

Visit any tax office close to you or near your business location and obtain a tax application form. The application form is free of charge.

Note that taxpayers are free to make inquiries at any tax office at no cost.

Step two

Complete the application form by filling in the following required information:

1. For individuals, the full name, residential address, phone number and email address of the individual.

2. For registered businesses (such as companies, business names, incorporated trustees and other registered organizations):

the full name of the organization;
date of incorporation or registration;
registration number;
registered office address of the business;
precise nature of the business;
date of commencement of business;
names and addresses of directors, proprietors, or partners of the business;
names and addresses of the shareholders (if any);
name and address of banker(s), and
names and addresses of auditors.

Step three

Submit an application letter and the completed application form at the relevant tax office together with the following:

1. certificate of registration (for businesses);

2. valid means of identification (such as national I.D. card, international passport or driver's license) for individuals;

3. a copy of a document showing proof of payment for electricity (for individuals).

Step four

Provide your biometric information.

Step five

Upon confirmation, you will be issued a 14-digit TIN, which will be used for tax remittance. You may also be issued a VAT certificate of registration, which makes the applicant a registered VAT agent for VAT payment.

Summary

The TIN is a unique number given to any taxpayer in Nigeria. It is issued after an individual or business has registered for tax. Among other things, the TIN allows you to remit your taxes, open and operate a business account, and obtain a tax clearance certificate when required.

You can register by sending an application letter to the FIRS office in the State where your business is located together with the completed TIN and VAT forms and other required documents, such as a valid I.D. card, certificate of registration (for businesses) and a copy of proof of the applicant's payment for electricity.

About the Author

Vivian Umelue is an attorney and legal templates programmer at Wonder.Legal and is based in Nigeria.