Federal government has become more serious in fighting tax evasion following the recent introduction measures to sanction tax defaulters who delay transmission of annual returns.
Otherwise, it would from July 1, 2017, impose additional 5 per cent charge on firms that fail to honour their tax obligations as and when due.
Whereas experts see the move as draconian and counterproductive, government said the target is to drive voluntary compliance on of ax obligation
Minister of Finance, Mrs. Kemi Adeosun, who announced the new interest rate spread on unpaid taxes for the year 2017, said such defaulters would pay about 19 per cent on their obligation which is 5 per cent above the Central Bank of Nigeria (CBN) 14 per cent policy rate.
The new interest rate, she noted, shall be 5 per cent over the Central Bank of Nigeria’s Minimum Re-Discount Rate (MRR) for 2017. She explained that Section 32(1b) of the Federal Inland Revenue Service (Establishment) Act 2007 empowers her to approve the new interest rate.
The Minister said the review of the interest rates on unpaid taxes was one of the necessary measures adopted by the Federal Government to enhance tax compliance, minimise tax evasion and deter late payments.
Adeosun said “Majority of Nigerian tax payers (PAYE) have taxes deducted automatically. However, those who do not and are required to file their taxes like companies and business enterprises, must understand that there are financial consequences for late payments. We believe that this will support our efforts to ensure that people pay their taxes promptly, thus providing a sustainable source of revenue to the government to finance infrastructure and other projects”.
Business Hilights recalls that the Minister had, during the Finance Ministers’ meeting convened by the G24 Group at the 2017 IMF/World Bank Spring meetings in Washington, DC USA, opened up on the need for Nigeria to embark on aggressive tax revenue generation in order to drive economic growth.
