Tax identification numbers will enhance revenue generation – Oduba

Mr. Oduba Oduba is the National Project Manager, Taxpayers Identification Number. In this interview with SIMON EJEMBI, he explains how taxpayers, tax authorities and the country can benefit from the project

What is the tax identification number all about?

The tax identification number 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 organisations 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 taxpayers. 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 centralised. Whether you are doing business in Nigeria or a resident, once you are issued this number, which is being anchored by Joint Tax Board, 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 for tax transactions. Essentially, this is designed to make life easier for both taxpayers and tax authorities.

How would you rate  the compliance level since the commencement of the programme, and which sector of th economy has been most responsive to the new tax system?

I had earlier mentioned that purpose of project is to uniquely identify taxpayers. The Federal Inland Revenue Service ordinarily register all corporate bodies and, fortunately, before this project, the FIRS had started identifying corporate bodies and issuing 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 organisations 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 the the introduction of electronic ‘Form M’ by the Custom Service 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. This is perhaps 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.

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

One of the key problems is that Individuals are not willing to register. We’re working on attaching social services to the TIN system. For example, TIN registration numbers will soon be required for processing driver’s license, international passport, etc.

What is the agency’s outlook for 2014?

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 taxpayers. Instead of waiting for the people, we will create centres at various spots and markets to capture individuals enmasse. We are working on the schedule for that and in 2014 more of that will happen.

Are there going to be penalties For defaulters?

For corporate bodies, soon it will be an offence to award contracts to an organisation without TIN. In the regulation, we stipulate the penalty. It will be between N250, 000 and N5m. 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.

How do you capture traders who feel they have no business with government that will warrant them to pay tax?

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.

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

We are aiming for 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 to integrate the processes and make it more smart, fast, efficient and attractive.

Considering the infrastructure deficit in the country, do you have the necessary infrastructure to ensure a smooth operation?

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.

In the light of the high level of fraud in the world, including identity theft, how secure would an individual’s TIN be?

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

This programme implies that government will have access to a large database of private and, sometimes, very sensitive personal information.

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.

Why are some states not part of the TIN project?

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.

There is an ongoing challenge between Lagos and Ogun States concerning the issue of where the residents should pay their tax.

How will the TIN help to resolve this challenge?

Under the TIN system, taxpayers will be identified by their Local Government Council.

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