Lagos to start using BVN to collect taxes

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Lagos State Internal Revenue Service (LIRS) has declared its readiness to integrate the existing Taxpayers Identification Digit (PID) into the nationwide Tax Identification Number (TIN) system with the Joint Tax Board.

This is in a bid to increase taxpayers’ database with a view of increasing its tax revenue.

The PID is a taxpayer’s identity code issued by the LIRS to taxpayers in Lagos State. To achieve this, the LIRS intends to leverage on Bank Verification Number (BVN) of taxpayers.

Consequently, every self-employed person is required to provide their BVN to the LIRS for creation of their unique PID, while corporate institutions are to ensure that their employees provide their BVNs for processing of their Tax Clearance Certificates (TCCs).

An article by Olufunmilayo Olaniyi of Andersen Tax LP, however, said that valid concerns have been raised in various quarters in relation to the Notice.

“The question on the minds of many taxpayers is: “Does the LIRS really have the power to make BVN a requisite parameter for registration and tax compliance? What mechanisms will be put in place to protect and guard the privacy of taxpayers?” she said

According to Olaniyi “another concern that has been raised is how businesspeople should organize their affairs going forward such that minimal tax footprints is created, in the light of the above. This is a significant issue especially in the informal sector where there is little or no separation between personal and business affairs of taxpayers. No transaction, personal or business, will now escape the all-seeing eyes of the taxman, it seems.”

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