The Taxpayer Identification Number (TIN) is a unique number allocated and issued to identify a person (individual or Company) as a duly registered taxpayer in Nigeria. It is to be used by that taxpayer alone. Registration for tax purposes is a legal obligation of every person who is required to pay tax in Nigeria.
A new business will not be able to open a corporate bank account without a TIN.
The following necessary details for obtaining and updating TIN should be presented to the tax office nearest to the address of the taxpayer.
For a Company, Enterprise or Business registered with the Corporate Affairs Commission (CAC):
1. Duly completed application form for TIN.
2. Either Certificate of Incorporation (for a company) or Business Name Registration Certificate (for an enterprise) showing clearly the registration number in each case.
3. Documents containing the following information:
•Address of company, enterprise or business
•Principal location of business
•Date of commencement of business
For an Individual who (or whose business) is not registered with the CAC:
1. Duly completed application form for TIN.
2. Any of the following valid identification documents:
•National Identity Card
•Staff identity card
•National Driver’s License
The following rules are important:
•All information marked * on the application form must be provided
•(ii) The characters of the name i.e. letters and other symbols constituting the name must not exceed two hundred (200)
•The characters of the address also must not exceed two hundred (200)
•Email address must be unique and active
•Mobile telephone number must be eleven (11) digits e.g. (08763201210).
Updating TIN under the ‘National Single Window’ System is a requirement for taxpayers with incomplete records at the Federal Inland Revenue Service (FIRS).
TIN may be updated at the tax office where it was initially generated by providing the following additional information:
After updating, the system indicates that “The TIN has been successfully updated”.
The Joint Tax Board TIN (JTB TIN)
It is important for a person to note the following information about the JTB TIN:
1) The JTB TIN is designed to subsequently replace the current TIN and is already in use within FIRS and several other states of Nigeria.
2) The JTB TIN has ten (10) digits, it is uniform and general across Nigeria. It is unique for every registered taxpayer in Nigeria and not limited to FIRS taxpayers alone.
3) The JTB TIN is presently being issued at the point of registration and also updated by FIRS and the states which have so far adopted it;
4) Every taxpayer in Nigeria will ultimately be required to possess and use only the JTB TIN.
TIN validation is the process of confirming that the updated TIN meets the necessary conditions for transacting business with other organisations such as Nigerian Customs Service (NCS), Central Bank of Nigeria, National Agency for Food and Drug Administration and Control, etc.
A taxpayer can validate his/her TIN directly on the FIRS Trade Portal i.e. http://www.trade.gov.ng/firs by following the simple procedure below:
i. Enter the TIN and the same email address that was provided to the tax office when updating.
ii. Next, enter the security word (captcha) and click on “Validate”.
iii. If the validation is successful, the following confirmation notice shall be displayed:
“Register with NCS – Done”.
iv. Then an automatic email notification from “Nigeria Single Window” with a log-in password and instruction on how to complete the registration process would be sent to the taxpayer’s email address.
v. Upon completing the validation exercise, an email will automatically be sent to the email address provided confirming successful validation. A taxpayer should therefore check the email.
This is for the taxpayer to re-confirm his/her updated and validated TIN.
A taxpayer experiencing difficulty in validating TIN (receiving error messages) should seek professional assistance from the tax office or send an email to: email@example.com
Unless you are an accountant or a fan of working with numbers, bookkeeping is probably not your favourite task. Adopting some good habits early can help you avoid costly errors when it comes to record keeping.
You probably keep a lot of the financial details of your business in your head: which supplier you need to pay, which customers are outstanding, etc. It’s understandable to do it this way, you won’t need to learn a new software, there is no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk.
However, when you don’t have a system and processes in place, unpleasant surprises can pop-up, goals can be missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and even improve your profits. It can also help you to stay out of trouble with tax authorities, suppliers, bank and other stakeholders.
Here are our five tips for small business bookkeeping.
Keep it separate
That new backpack for your kids isn’t a business expense, but your business cash was handy so you used it. Sure, you can pay back your business for a personal expenditure, or the other way around, but if you’re going to do it right you actually have to record an accounting transaction. Things get complicated fast, and you don’t need that headache. By keeping separate bank and cash accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place. Some applications can automatically handle the behind-the-scenes accounting for crossover expenses, but even so, we recommend handling business and personal finances as independently as possible.
Call in a pro
Since the days of the abacus, accountants have been trusted and respected allies to small business owners everywhere. Their intimate knowledge of the profession as well as tax laws in their jurisdiction will save you money almost every time. I know how tempting it can be to save some cash and do it yourself, but it’s almost never more cost-efficient in the end. An accountant will almost always find more deductions and keep you penalty-free. On that note, the cleaner your records, the lower the charges of an accountant, so make sure you’re organized all year-round. But when things get technical or taxes are due, save yourself the money, time and headaches and call in a trusted professional.
Plan for Major Expenses
Be honest about the expenses that could be coming up in the next one to five years. Is it likely that you will need to upgrade your facilities? Is your office equipment on its last legs?
It is important to acknowledge the seasonal ups and downs of your business, and how they will affect your ability to spend during those times.
By making sure that you have forecasted for major upgrades, or peaks in staffing costs, you will avoid taking money out of the company in good months and finding yourself short in slow months.
Track Your Expenses
Expenses can be hard to track, which means that you may be missing tax saivings that you could have benefited from.
Business credit cards can be handy tools to make sure all expenses are kept together and tracked. As long as you keep up to date with your payments that is. To help prepare for audits, it is also useful for you to make notes in your calendar of the clients that you are meeting for each of those business meetings and events. This will help substantiate your expenses for your tax records, should you be audited.
Record Deposits Correctly
Whether it’s a pocket notebook and pencil, an Excel spreadsheet or financial software like Sage, make sure you keep track of what is being deposited into your business bank account.
You are likely to make a variety of deposits in your account throughout the year. From loans, to sales revenue, to cash infusions from your personal savings. If you cannot account for where each of the deposits have come from you’re leaving yourself open to paying taxes on money that isn’t income.
Set Aside Money for Taxes
You know that you’re going to have to pay taxes and you know when. So systematically put money aside for it. Unpaid taxes can incur penalties and interest. Such penalties and interest can in fact liquidate your business, so make sure the money is there when you need it.
By putting money aside each month, or each time a contract is paid, it will come as less of a sting when taxes are due.
Finally, don’t forget to get paid
This one seems pretty obvious, but you would be shocked at how many small business owners don’t properly track invoices and customer payments. If you’re not keeping proper records that you can make sense of at a glance, it could be months before you realize you have outstanding invoices. You could be collecting payments late, or missing some altogether.
Late and unpaid bills can hurt your cash flow. Assign someone to track your billing. |Put a process in place for if a bill goes unpaid. That can be issuing a second invoice, making a phone call and even levying penalties such as extra fees at certain deadlines.
Make a plan for if clients are 30, 60 and 90 days late. Remember, every late payment is an interest-free loan that hurts your cash flow.Make sure you’re properly tracking all payments due and recording when each invoice is paid, how long customers generally take to pay, and which customers you’ve had difficulties collecting payments from in the past.