Taxes are an integral part of the business environment. They are compulsory levies payable by individuals, groups of individuals, or other legal entities to the government with no corresponding entitlement to receive something definite and direct in return.
Also, taxes are how the government provides for basic amenities, which in turn create environments to carry out our activities, whether they may be business inclined or not. Every legal entity is expected to pay taxes, and all of this information is connected to your tax identity.
In this post, we shall discuss what a tax identification number is and all other issues concerning tax identity.
What is a tax identification number?
A Tax Identification Number (TIN) is a unique number used as a tracking number by the Federal Inland Revenue Service.
Think of the tax identification number like a phone number or an account number. It belongs to one specific individual and represents all information about that person. The tax identification number does just that; it represents all information about a taxpayer in Nigeria.
Why should I have a tax identification number?
As earlier mentioned, paying your tax as an individual or corporation is compulsory, and every company or individual must have its unique TIN. The law is that upon incorporation, every company is to register for tax purposes.
Upon registration, the company is given its TIN, and this means the government recognizes it as a legal entity and to confirm your business registration, you must possess your unique TIN.
What benefits can I get from having a tax identification number?
Besides the fact that the tax identification number is compulsory, there are added benefits that you can enjoy. They include;
- Opening a corporate bank account: the TIN helps you provide the basis for opening and operating a corporate bank account. It is proof that you have a registered business in Nigeria.
- Government loans: your business has a better chance of applying and receiving government loans – for instance, the Bank of Industry loans – if it has a TIN.
- Application for trade licenses, Import and export licenses becomes easier.
- Registration of motor vehicles
- Applying for a certificate of occupancy.
- As an individual, it offers you access and eligibility to a lot of schemes, such as the Lagos State Housing Scheme
How can I get a tax identification number for my business?
Applying for a Tax identification number is easy and also free. All you need to do is pay a visit to the nearest federal inland revenue service office closest to you. You will need to go along with the original copy and two photocopies of the following documents.
- Memorandum & Articles of Association
- Certificate of Incorporation
- Your Company seal
- A Utility bill
- Application letter containing your company’s letterhead.
- A Duly completed TIN Application form
The application process usually takes a day or two, after which FIRS will issue you your TIN.
How Can I get a TIN as an individual?
To apply for the tax identification number as an individual you will need the following documents:
- A completed TIN application form
- Any of the following valid identification documents: international passport, national ID, workplace identity card, or a valid driver’s license.
Everyone needs an identity. And with tax issues, it is even more critical. Not only does it stand as proof that you make tax payments, but it is also another proof that you abide by the law.
On a larger scale, the tax identification number motivates the fulfilment of tax payments, and enable the government to keep providing the necessary tools needed for creating the environments required for our daily activities.