Nigeria has close to 500 000 registered companies. Unfortunately for the government, however, only around 120 000 of them pay their taxes.
In an effort to combat tax evasion, the country’s Federal Inland Revenue Service (FIRS) has beefed up its policies. By collaborating with the central bank, the tax authority will deny banking-facilities access to individuals and companies who fail to join its register. What’s more, tax evaders potentially face a prison sentence of up to five years.
According to a CNBC Africa report, FIRS chairperson Sunday Ogungbesan says that, in the past, it was difficult to track the financial activities of those who did not pay taxes – most of whom claimed their firms were not active. But not anymore.
Tax identification numbers for corporate bank accounts were introduced in 2012, although some firms whose accounts pre-date the system are not obligated to have one.
