Introduction
Mention “TIN number” in Nigeria’s business circles, and you are bound to be met with looks of familiarity as well as frustration. Since its introduction in 2008, this unique Taxpayer Identification Number has become indispensable for conducting key financial activities in the country.
However, the intricate rules and periodically changing regulations around TINs also confuse entrepreneurs, and as a result, they end up procrastinating their TIN registration only to be plagued by non-compliance during critical transactions due to TINs.
That is where this exhaustive guide comes in with the aim to finally decode all TIN-related issues - right from definitions, and eligibility criteria to step-by-step application instructions, key benefits, and verification processes. This can help you add a “TIN expert” to your arsenal of financial know-how.
What is a TIN Number?
In the simplest sense, your TIN serves as your unique financial/tax identity on Nigerian governmental records. Legally, every individual and registered entity operating businesses in Nigeria needs to possess a valid TIN.
The Federal Inland Revenue Service (Click to Visit: FIRS website) is the Nigerian government agency responsible for assessing, collecting, and accounting for taxes. The FIRS issues TINs to ensure proper tax administration and compliance. With TIN, the FIRS can identify taxpayers and track their tax transactions across various activities.
Much like your Corporate Affairs Commission (CAC) registration number incorporates you into Nigeria’s business identities, the TIN marks your entry into its tax bracket. Whether filing returns, claiming Goods and Services Tax refunds (https://www.firs.gov.ng/tax-refund/) or bidding for lucrative tenders, a TIN facilitates seamless compliance.
How To Get A TIN (Tax Identification Number) For Your Business - A Step-By-Step
Step 1- Application Checklist
Before initiating your TIN application with the FIRS, ensure you have the following documents handy as per your applicant category:
- Certificate of Incorporation
- Memorandum & Articles of Association
- Business Address Verification
- Business Premises Lease/Rent Documents
- Tax Clearance of Directors
Having this checklist in place upfront will minimise back-and-forth during the application process.
Step 2 - Submit Physical/Online Application
With your documents ready, visit the nearest FIRS office (verify here FIRS Office for form collection and submission. You can also conveniently register online via the e-services portal (https://tin.jtb.gov.ng/)
If you take the physical processing option, attach clear copies of your documents along with duly filled application forms in triplicate (one original, one copy for official filing, and one for you).
Once submitted, an application reference number is generated. Retain this for all future tracking needs. Otherwise, fill in the details on-screen if you use the online option.
Step 3 - Activate TIN After Verification
You will receive notifications via email and SMS once your details are verified and TIN generation is complete. Upon successful activation, you can utilize your TIN seamlessly for tax payments, refunds, banking needs, and business growth opportunities in Nigeria.
Benefits of Having a TIN Number
Apart from meeting fundamental tax compliance prerequisites, your TIN unlocks additional privileges:
1. Smoother Tax Filing, Reporting and Payment
The most important privilege is that TINs facilitate compliance with tax laws and the clear avoidance of legal penalties associated with tax evasion.
2. Access Tax Assistance Schemes
The Nigerian government has launched various programs to ease small business tax burdens. Recently, the FIRS revealed that it had taken various steps to support micro, small, and medium enterprises (MSMEs), such as supporting the revision of the National Tax Policy to reflect the realities of the economy. Nationally, small or medium-sized businesses that are engaged in primary agricultural production are able to enjoy an initial tax-free period of four years, which can be extended for an additional two-year period if they perform satisfactorily.
Also, according to Pwc’s Worldwide Tax Summaries, companies in Nigeria that are 100% export-oriented but located outside tax-free Export Processing Zones (EPZs) can enjoy a three-year tax holiday, provided that the export proceeds form at least 75% of their turnover. Profits of companies whose supplies are exclusively inputs to the manufacture of products for export are exempt from tax.
In addition to these, there is also Nigeria's Export Expansion Grant (EEG) Scheme, which grants an Export Credit Certificate (ECC) to companies as an incentive that can be used to settle all federal government taxes. Companies engaged in gas utilisation and tourism can also enjoy tax-free periods and other incentives. Finally, before the Finance Act of 2023, there was the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, where businesses were entitled to recover the cost incurred by them in the construction or refurbishment of eligible roads as credit against future company income tax (CIT) payments.
With a tax identity via TIN in place, entrepreneurs in Nigeria can avail themselves of some of these schemes and programs for business growth.
3. Boost Lending Opportunities
Under Section 10, subsection 2 of CIT Acts of the revised 2019 Finance Acts, Nigerian banks are mandated to acquire TINs from businesses prior to account opening. Every business owner will be best served to have their TINs at hand wherever they approach their banks for financial services. As banking digitisation peaks, Nigerian lenders increasingly rely on integrated data systems for credit decisions. Validity of applicant TIN numbers on tax authority databases is a key indicator as it determines tax behavior. Those holding accurate TIN details thus enjoy swift, paperless loan or overdraft approvals.
4. Streamline Payroll Management
Besides proprietor tax liabilities, having an updated company TIN allows seamless employee PAYE (Pay As You Earn) deductions. It enables error-free salary tax deducted at source (TDS) calculations. The TDS mechanism helps the business making certain payments to deduct a certain percentage of tax from the payment and remit it to the government. TDS is applicable to various types of income such as salaries (PAYE), interest on fixed deposits, rent, commissions, etc. The purpose of TDS is to ensure that income tax is collected in advance and to prevent tax evasion. You also steer clear of excess contributions resulting from multiple arbitrary PAYE remittances with the advantage of your TIN.
5. Participation in Public Sector Tenders, Contracts
Proof of tax compliance via a TIN is a prerequisite to bid for lucrative government contracts.
6. Facilitates Customs Clearance and Foreign Trade
A TIN is mandatory for import or export trades and clearance of goods across Nigerian borders.
What all of these make obvious is that, as your primary tax identification, the TIN empowers financial inclusion, business formalisation and operational efficiency. It becomes quite apparent that without expertise navigating the maze of renewals, payments and regulatory updates, harnessing its full potential remains difficult.
TIN Updates and Verification
TINs in Nigeria are issued once and are not renewable. However, individuals or businesses may need to update their TIN information if there are any changes in their personal or business details. This can be done by visiting the nearest FIRS office with relevant documents such as TIN, Tax Clearance Certificate (TCC) and CAC Registration Documents for companies.
TIN Status Verification Steps
TIN status can also be verified online using the Joint Tax Board TIN verification tools It is important to note the following information about the JTB TIN
(i) The JTB TIN is designed to subsequently replace the FIRS-issued TIN and is already in use within FIRS and several other States of Nigeria;
(ii) The major difference is that the JTB TIN has 10 digits, unlike the 12-digit FIRS TIN, and it is not limited to FIRS Taxpayers alone,
(iii) The JTB TIN is presently being issued out at the point of new registrations and also updated by FIRS and the States which have so far adopted it,
(iv) Every Taxpayer in Nigeria will ultimately be required to possess and use ONLY the JTB TIN (see image for reference)
Quick Faq:
Q: How can I confirm my business’s TIN number (also known as a non-individual entity)?
A: Follow these steps:
1. Optionally select the Organisation’s Date of Incorporation.
2. Choose a search criteria (TIN, CAC registration Number, or Registered Phone Number).
3. Enter the appropriate value based on your selected criteria.
4. Confirm you're not a robot with reCAPTCHA.
5. Click the Search button.
Q: What's necessary to retrieve full information from the panel?
A: To access comprehensive information, provide either the date of birth (for individuals) or the organization's date of incorporation (for non-individual entities).
Conclusion
We hope navigating the integral world of TIN numbers - from registrations and usage guidelines to updating and verification - feels less perplexing after reading this guide!
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