14 Oct NIGERIA’S NEW TAX PAYMENT OPTION: Pay Your Taxes in Instalments

Exciting Changes in Nigeria’s Tax Payment System: Introducing Instalment Options!

The Federal Government of Nigeria is set to revolutionize tax payments with the introduction of a new option that allows individuals to pay their taxes in instalments. This proposal, featured in the recently submitted Nigeria Tax Bill 2024, is currently awaiting consideration and approval by the National Assembly.

What This Means for Taxpayers:

With this new tax payment option, individuals now have the flexibility to meet their tax obligations either through a single lump-sum payment or by spreading the payments over time. This initiative aims to ease the financial burden on taxpayers and enhance compliance.

Key Features of the Proposed Tax Bill:

• Instalment Payments: According to Section 48 of the draft bill, taxpayers can choose to pay their taxes in equal monthly instalments, with the first payment due no later than the third month of the accounting period. The final instalment must be completed before the self-assessment filing deadline.
• Tax Refunds: The government also plans to create a dedicated account, managed by the Accountant-General of the Federation, to streamline tax refunds. Taxpayers who overpay will receive refunds within 90 days of an audit, with options for setoffs against any outstanding tax liabilities.
• Revenue Distribution: The bill outlines the distribution of value-added tax (VAT) revenue: 10% to the Federal Government, 55% to State Governments and the Federal Capital Territory, and 35% to Local Governments. Notably, 60% of the funds allocated to states and local governments will be distributed based on derivation.

Looking Ahead

This innovative approach to tax collection not only aims to improve compliance rates but also supports the financial planning of taxpayers. At EST AUDIT, we’re committed to keeping you informed about the latest developments in Nigeria’s tax landscape. Stay tuned for updates and further insights into how these changes will impact individuals and businesses alike!