Nigeria to introduce new rules to stop tax evasion

Tuesday, 11 August 2015 01:04 - - {{hitsCtrl.values.hits}}

Reuters: Nigeria’s Federal Inland Revenue Service (FIRS) said on Friday it would crack down on tax evaders by denying access to banking facilities for individuals and companies that failed to join its register.

FIRS chairman Sunday Ogungbesan told a news briefing in Lagos there were more more than 440,000 companies in the country, which has Africa’s biggest economy, but only about 120,000 paid taxes.

Ogungbesan said it was difficult to track the financial activities of those who did not pay taxes, most of whom said their firms were not active.

“We are collaborating with the central bank to enforce compulsory registration with the tax authority by companies and individuals before they can access their bank accounts,” said Ogungbesan.

Tax identification numbers were introduced for corporate bank accounts in 2012 but some firms whose accounts pre-date the system are currently not obliged to have one.

President Muhammadu Buhari, who took office two months ago, was elected in March after vowing to crack down on corruption.

“There is a need to review our tax laws,” said Ogungbesan, adding they were not stringent enough to deter evaders.

Tax evasion can be punished with up to five years in prison.