This move by Nigeria is BIG:
“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc) are required to obtain, complete and submit Self – Certification Forms to their respective Financial Institutions.
“Persons holding accounts in different financial institutions are required to complete & submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures in line with the Income Tax Regulations 2019.” Source
Expect high escape velocity out of Nigeria , and the world of Bitcoin to blossom! Nigerians have about N30 trillion in bank deposits. Possibly, if this exercise is done yearly, government could simply be taxing the same money since it is focusing on bank deposits. Multiple taxation of the same funds could be at play here.
Nairametric notes potential possibilities:
Comply or face sanctions: The Government urged Nigerians to comply with the requirements and execute all forms needs, if not sanctions may be introduced in the forms of monetary penalty or inability to operate the account.
- The government did not explain what those sanctions will be and how it will be implemented.
- The inability to operate the account suggests the government could end up freezing the bank account of Nigerians
- Nigerians have over N30 trillion in bank deposits according to Nairalytics research.
What this means: It appears this is part of the government’s efforts to widen the tax base as it steps up its strategy of relying on taxes to increase its revenue. Government revenue has been hard hit by the drop in oil prices and the Covid-19 Pandemic affecting its ability to pay for development programs, meet overheads and offer palliatives to Nigerians who are reeling from economic crunch.