FG Proposes NIN and Taxation for Foreigners Living in Nigeria

On September 26, 2024, the Federal Executive Council (FEC) announced a significant legislative proposal aimed at amending the National Identity Management Commission Act No. 23 of 2007. This amendment seeks to authorize the issuance of the National Identification Number (NIN) to foreigners residing in Nigeria. The proposal represents a broader initiative to streamline tax administration and ensure compliance among all individuals earning income within the country, regardless of their nationality.

In conjunction with the NIN amendment, the FEC also proposed the Economy Stabilisation Bill. This piece of legislation is designed to facilitate the taxation of foreign individuals who live and work in Nigeria, thereby expanding the definition of registrable persons to include foreigners with taxable income or presence in the country. The bill aims to make the NIN mandatory for financial transactions relevant to tax administration.

One of the key provisions within the proposed legislation is a new paragraph to Section 16, which states: “Any person, whether or not he is a citizen of Nigeria, who is deemed to be resident or otherwise subject to tax in Nigeria under any legislation in force in Nigeria.” Should this bill be enacted, it would mark a significant shift in the regulatory landscape, imposing tax obligations on expatriates and income-earning immigrants.

Mr. Bayo Onanuga, the Special Adviser to the President on Information and Strategy, provided insights into the proposal during a briefing for State House Correspondents at the Aso Rock Villa in Abuja. He emphasized that if the National Assembly approves the bill, it would require all individuals living in Nigeria, including foreigners, to register and obtain a NIN. This identification number would not only facilitate tax collection but also establish a formal tax identity for foreign workers.

Onanuga further elaborated, stating, “Once you are doing some work here and earning income, you will be registered and given an NIN so that you can be taxed. Your NIN will give you your tax identity, and you can also be taxed and come under our tax structure.” He noted that the existing law that established the National Identity Management Commission initially excluded foreigners from the registration process, which this new proposal seeks to amend.

In addition to the NIN and taxation measures, Onanuga also announced a third legislative proposal aimed at amending the Nigerian Maritime Administration and Safety Agency Act No. 17 of 2007. This amendment would allow for fees and other charges to be paid in Nigerian Naira, thus enhancing the ease of doing business in Nigeria. The proposed change to Section 15 introduces a new subsection, stating, “All fees, charges, levies, fines and other monies accruing and payable to the Agency under this Act may be paid in Naira at the applicable official exchange rate.”

This shift from charging fees in U.S. dollars to accepting Naira is part of the government’s broader initiative to strengthen the national currency and reduce the dollarization of the Nigerian economy. Onanuga remarked, “The government is now saying, ‘pay in Naira. Everything doesn’t have to be in dollars.’”

As the proposals make their way through the legislative process, they could potentially reshape how foreign nationals engage with Nigeria’s economic landscape, ensuring that everyone contributing to the economy is accounted for and that tax obligations are met uniformly across the board.