Tax Defaulters To Pay 5% Interest From July 1
The Federal Government has taken its campaign for more taxes to the next level.
It has now raised the interest rate on unpaid taxes.
This, the finance ministry said on Monday, was to discourage companies and individuals from paying late and racking up a larger debt.
The ministry said the measure will take effect from July 1 and that the rate would be 5% over a Central Bank rate known as the Minimum Rediscount Rate, a benchmark lending rate.
"The review of the interest rates on unpaid taxes was one of the necessary measures adopted by the Federal Government to enhance tax compliance, minimize tax evasion and deter late payments," the finance ministry said in a statement.
Economists have long criticised the low levels of tax in Nigeria.
In March, the Federal Government laid out plans to increase its overall tax to GDP ratio to 15% by 2020 from 6% it currently is.
The plan includes improving tax collection, targeting an annual tax revenue of 350 billion Naira a year and proposal to raise tax on luxury goods to 15% from 5%.