KEY POINTS
- The new 2024 Tax Bill allows taxpayers to now pay taxes in instalments.
- Tax refunds will be paid into a special account to preserve the transparency.
- Existing agencies to be replaced by a new Nigeria Revenue Service to streamline collection.
In efforts to ease burdens of the economy and making the nation’s economy more flexible, the Nigeria Tax Bill 2024 proposes a flexible tax payment option, where individuals and businesses can pay taxes as instalments instead of in lump sum.
The draft bill, which he submitted to the National Assembly for his consideration, seeks to make it easier for taxpayers to comply while increasing revenue collection.
Tax refunds and instalment payment
The draft bill, obtained by our correspondent, states that taxpayers can either submit the total sum in one instalment or make instalment payments, but the last instalment must be made before the filing deadline. According to the bill, the payments will be paid in equal monthly installments spread over the accounting period.
According to the bill, ‘Every person shall pay tax due in one amount or in instalments, the final of which is due on or before the filing deadline.’
Also, the government intends creating a dedicated account to be managed by the Accountant General of the Federation to enhance transparency and accountability in tax refunds.
Revenue service and reforms new
The bill, part of broader reforms, also recommends the establishment of the Nigeria Revenue Service to take over the responsibilities of 60 agencies involved in revenue collection, such as the Nigerian Customs Service and Nigerian Ports Authority.
The reforms are also in line with the recommendations of the Presidential Fiscal Policy and Tax Reforms Committee headed by Taiwo Oyedele.
The bill also proposes for a tax tribunal and ombudsman to resolve such disputes and to treat taxpayers fairly.
VAT distribution and compliance
The bill also provides for sharing of value added tax, VAT revenue among the Federal Government, where 10 percent be allocated to it, the State Governments and federal capital territory, which will get 55 percent, while Local Government will receive 35 percent. To ensure fair resource allocation, sixty (60) per cent of state and local government funds will be distributable based on derivation.
The bill further makes a provision for refunds for excess tax paid, with the Accountant-General’s office responsible for refund within 90 days after audit. The government also allows you to offset refunds with future tax liabilities.
According to The Punch, The instalment based tax payment paradigm reflects the Federal Government’s commitment to decongesting tax compliance and maximising the efficiency of revenue collection for the country’s long term fiscal sustainability.
