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 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.
Nigeria depends on crude exports for about 70 per cent of government revenue and more than 90 percent of foreign exchange. The price of Brent crude has dropped by more than half since peaking in June last year, undermining President Muhammadu Buhari’s ability to deliver on his election promises since he took office in May.
Ogungbesan said, the FIRS will put more effort in meeting targets after its collection of N1.97 trillion ($9.9bn) in revenue in the first half fell short of a goal of N2.29 trillion.
“If we achieve our revenue targets, to a great extent, government deficits will be reduced.
“Our plan is to bring every business into the tax net; this economy can survive outside oil,” he noted.