Income earners and business owners have one common responsibility. Paying tax. A tax identification number (TIN) makes it possible to perform this responsibility.
Many people need to learn what TIN is when to use it, or what it works for. This article will provide information on these.
What is a Tax Identification Number (TIN)?
A Tax Identification Number (TIN) is a unique identification that enables and tracks the tax activities of individuals and businesses.
TIN is indicated on tax documents, allowing relevant authorities to identify a business and accurately record and reference its tax payments.
Who Issues a Tax Identification Number?
Nigeria’s Tax Identification Number (TIN) is similar to the US’ Individual Tax Identification Number (ITIN). The Internal Revenue Service (IRS) issues this document in the US. In Nigeria, the issuing body differs.
It all depends on who the applicant is.
For example, civilian applicants get their TIN from the States Board of Internal Revenue/Federal Capital Territory Inland Revenue Service (JTB TIN). On the other hand, veterans get theirs from the Federal Inland Revenue Service (FIRS).
The FIRS also addresses TIN allocation for diplomats and corporate bodies. Having these two bodies address TIN registration keeps the process smooth.
Joint Tax Board
The Joint Tax Board (JTB) was established by section 86 (1) of the Personal Income Tax Act cap. P8 LFN 2004. It contributes to the tax administration process in Nigeria. More importantly, the JTB focuses on creating uniform standards and streamlining tax coordination for individual taxpayers across the country.
Federal Internal Revenue Service
The Federal Inland Revenue Service (FIRS) got autonomy and financial support in 2007. This happened through the Federal Inland Revenue Service (establishment) act of the same year. It has since developed into a well-structured and highly productive organisation,
In addition to its services, the FIRS site is super resourceful. You can find tax documents like the national tax policy, tax law, statistics reports, and more.
How to Generate a Tax Identification Number
As we’ve mentioned, Nigerians have two ways of generating a TIN. The JTB option is mostly available to civilians, and the second option, the FIRS, is available to a range of other entities. In this section, we look into both options.
On the Joint Tax Board Platform
Registering as an individual: JTB supports online applications. To get started, simply access the platform’s website.
- Next, scroll past the picture carousel and access the quick links menu on the left.
- Click on “Register TIN (Individuals)”. This is the sixth item from the top of the quick links menu.
- This selection takes you to a registration page. Enter your BVN, date of birth (DOB), first name and last name in the respective fields.
- Tick the reCaptcha button to confirm that you are not a robot.
- Submit by clicking “Search”
Registering as a business or non-individual: You will also notice the option to “Register TIN (non-individuals)”. This might be a new implementation on the JTB platform but lots of people will be happy to see it.
If you own an organisation, this should work for you. You can choose from ten types of entities. They include incorporated trustee, limited by guarantee, partnership, private limited company, private unlimited company, public limited company, sole proprietorship, business name, limited liability partnership, and limited partnership.
The steps for this non-individual TIN registration are:
- Select your entity from the drop-down menu
- Input your correct company or organisation’s registration number
- Enter the name by which your company or organisation is registered.
The system automatically processes your input, providing the necessary information.
On the FIRS Platform:
As with JTB, TIN registration with the FIRS can be done online. Visit the FIRS website and log in as an individual or business to begin. If you are new to the platform, click here to create your account.
Personal account creation requires NIN, email address, phone number and more. After the set-up, return to the login page and proceed to generate your TIN. Be sure to follow each step carefully.
Tax Identification Number (TIN) Verification
On the JTB Platform: You can access the TIN Registration Search portal here. Both individual and non-individual taxpayers can use this system. The required entries are: a Date of Incorporation or Date of Birth, Search criteria of BVN, TIN, or phone number, a search value for the chosen criteria, and a reCaptcha.
On the FIRS Platform: The FIRS TIN verification portal can be accessed within login. It accepts both JTB and FIRS-issued TIN.
Where/When Nigerians Might Need to Submit a TIN
Your Tax Identification Number (TIN) is not only used by Nigerian tax agencies. Certain platforms require that you submit this as a way of identification. For instance, if you are opening a business bank account, you are required to provide a TIN for verification and tax-related purposes.
These platforms also use the TIN to confirm if tax deductions need to be made to your account.
- Online Marketplaces: Sellers on online marketplaces (e.g. Jumia) need to have a TIN. They may not submit it at the start of their business. However, they must do so when their revenue increases to a certain extent. The submission will ensure they are charged tax on their business.
- Freelancing Platforms: Online marketplaces like Upwork are aligning themselves with international requirements. That includes collecting tax information from their users. Nigerians and other non-US individuals have to fill out the W-8BEN or W-8BEN-E forms for this. Your tax identification number (TIN) will be required to complete this form. It ensures you are taxed on your income.
- Real Estate/Property Acquisition/Sale: Real estate transactions come with lots of paperwork and verifications. For example, involved parties have to be tax-compliant. To confirm, the buyer, seller, and/or agent has to submit a TIN.
- Job Employment: Local employers may ask their staff to submit a TIN. This allows for tax deductions (from salary), in compliance with existing Nigerian laws. The deducted taxes are paid to an appropriate tax agency.
How to Generate and Verify Your Tax Clearance Certificate (TCC)
Tax Clearance Certificate, TCC, is a document that shows if an entity is tax compliant. The Joint Tax Board (JTB) and the Federal Inland Revenue Service (FIRS) can issue a TCC on request.
However, getting a tax clearance certificate is one thing. Using the certificate to confirm compliance is another thing entirely. Here’s how to go about it:
On the FIRS platform
- Navigate the website to the TCC page or enter the address “tcc.firs.gov.ng” in your browser.
- Once open, you will be prompted to sign in. Input your appropriate FIRS details to continue.
- Now, look for a button that says “Generate TCC”. Click on this to download your certificate.
On the JTB platform
- Navigate the website to the “verify your tax clearance certificate” page.
- Use the state name to access the state IRS link. This should correspond with the location where your entity exists.
- After opening the appropriate state IRS link, enter your tax clearance certificate (TCC) number.
The above steps should work in verifying your tax clearance certificate.
FAQ
Where can I access reliable tax information?
Both the Joint Tax Board and the Federal Inland Revenue Service websites. However, the latter holds more insights.
What is the Tax Reform Bill 2024 all about?
The Tax Reform Bill 2024 reportedly promotes uniform procedures for a consistent and efficient administration of tax laws to facilitate taxpayers’ compliance with current realities. The Tax Reform Bills comprise the Nigeria Tax Bill, Nigeria Revenue Service (Establishment) Bill, Nigeria Tax Administration Bill, and Joint Revenue Board (Establishment) Bill.
What documents do I need for a TIN registration
Your Bank Verification Number (BVN) and National Identification Number (NIN) works for TIN registration.
