FG proposes tax payment in instalments

The Federal Government has proposed introducing a tax payment option that enables individuals to pay their taxes in instalments.

It introduced this in the Nigeria Tax Bill 2024, recently submitted to the National Assembly for consideration and approval. Our correspondent obtained a copy of the draft on Sunday.

This means that each person now has the flexibility to fulfil their tax obligations either by making a single lump sum payment or by spreading the payments out over time and settling before the designated due date for filing.

The government also proposed the creation of a special account by the Accountant-General of the Federation for tax refunds.

Last week, the government instituted a comprehensive set of fresh tax reforms aimed at significantly boosting revenue collection.

The four new bills sent to the two chambers of the National Assembly are aimed at giving legislative frameworks to some proposals of the Presidential Fiscal Policy and Tax Reforms Committee headed by Taiwo Oyedele.

The reforms, designed to enhance the efficiency of collecting direct taxes, along with various levies that are imposed on behalf of the government, will bar the Nigerian Customs Service, Nigerian Ports Authority, and 60 other revenue collection agencies from participating in revenue collection activities, but will lead to the creation of the Nigeria Revenue Service. It also proposed the creation of a tax tribunal and ombudsman.

However, an analysis of the 160-page document showed that the government, as part of efforts to increase collection, hinted at the possibility of tax payment in instalments.

Section 48 of the draft bill read, “Subject to section 11 of this Act and without prejudice to any other provision of this Act, every person shall make payment of tax due on or before the due date of filing in one lump sum or instalments, provided that the final instalment shall be paid on or before the due date of filing.”

It said the amount shall be payable in equal monthly instalments together with a final instalment and shall be in an amount equal to one-twelfth or where the accounting period is less than a year.

“Without prejudice to section 16 of this Act, the tax due for any accounting period shall be payable in equal monthly instalments together with a final instalment as provided in subsection four of this section.

“The first monthly payment shall be due and payable not later than the third month of the accounting period and shall be in an amount equal to one-twelfth or where the accounting period is less than a year, in an amount of equal monthly proportions of the amount of tax estimated to be chargeable for such accounting period in accordance with this Act.

“Each of the remainder of monthly payments to be made subsequent to the payment under subsection two of this section shall be due and payable not later than the last day of the month under consideration; and in an amount equal to the amount of tax estimated to be chargeable for such period by reference to the latest returns submitted by the company in accordance with section 16 of this Act less so much as has already been paid for such accounting period divided by the number of the monthly payments remaining to be made in respect of such accounting period,” the draft copy added.

The bill further specified that the final instalment of tax shall be due and payable on or before the deadline for filing the self-assessment for that accounting period.

This amount will be the tax assessed for the period minus any amounts already paid under subsections two and three of this section.

Additionally, any instalments estimated to be chargeable will be treated as tax charged and assessed for the purposes of sections 64 and 53 of this Act.

Culled from The PUNCH