FG introduces installment payments for taxes.

The federal government has suggested allowing people to pay their taxes in installments by introducing a tax payment option.

This was included in the Nigeria Tax Bill 2024, which was just sent to the National Assembly for approval. A copy of the document was received by our journalist on Sunday.

This implies that everyone now has the option to pay their taxes in full at any time by either spreading them out over time or by paying all at once and settling before the deadline for filing.

The administration also suggested that the Accountant-General of the Federation establish a dedicated account for refunds of taxes.

The administration implemented a broad package of new tax measures last week with the goal of greatly increasing revenue collection.

The four new legislation that have been forwarded to the National Assembly's two houses are intended to provide legal backing for certain recommendations made by Taiwo Oyedele's Presidential Fiscal Policy and Tax Reforms Committee.

The Nigerian Customs Service, Nigerian Ports Authority, and sixty other revenue collection agencies will not be allowed to participate in revenue collection activities as a result of the reforms, which are intended to improve the efficiency of collecting direct taxes and various levies imposed on behalf of the government. Instead, the Nigeria Revenue Service will be established. It also suggested setting up an ombudsman and tax tribunal.

Nevertheless, a review of the 160-page document revealed that the government made reference to the option of paying taxes in installments as part of its attempts to improve collection.

The draft bill's Section 48 stated as follows: "Everyone shall make payment of tax due on or before the due date of filing in one lump sum or in installments, provided that the final instalment shall be paid on or before the due date of filing, subject to section 11 of this Act and without prejudice to any other provision of this Act."

It stated that the amount must be paid in equal monthly installments plus a final installment, and that it must equal one-twelfth of the total amount due if the accounting period is shorter than a year.

"The tax due for any accounting period, subject to section 16 of this Act, shall be paid in equal monthly installments plus a final installment as specified in this section's paragraph four.
The first monthly payment must be made by the third month of the accounting period at the latest. It should be made in an amount equivalent to one-twelfth, or in the case of a shorter accounting period, equal monthly portions of the total estimated tax that this Act will charge for that accounting period.

"Every monthly payment that needs to be made after the payment under subsection two of this section must be made by the last day of the month that it pertains to. It should be made in an amount that is equal to the estimated tax liability for that period based on the company's most recent returns filed in compliance with section 16 of this Act, minus the amount that has already been paid for that period divided by the number of monthly payments that need to be made for that period," the draft copy further stated.

The measure additionally stipulated that the last tax installment must be paid by the deadline for submitting the self-assessment for that accounting quarter.

This sum represents the tax assessed for the period less any payments paid in accordance with this section's subsections two and three.

In addition, for the purposes of this Act's sections 64 and 53, any estimated chargeable instalments will be regarded as assessed and charged taxes.

The bill continued by stating that after an audit by the appropriate tax body, taxpayers would get a refund for any overpayment or excess tax that was owed.

"The applicable tax authority may impose any regulations and requirements that are required to enable the reimbursement outlined in this section's first subsection. Any tax refund that is due must be made within 90 days of the appropriate tax authority's decision, as per paragraph two of this section. The taxpayer may choose to set the refund off against any other taxes owed.

To settle tax refunds, the Accountant-General of a State or the Federation must establish a specific account for each form of tax and deposit monies into it. An estimate of the amount to be set aside for tax refunds must be given to the Accountant-General of the Federation or of a State by the relevant tax body.

"The committed accounts created under subsection (4) of this section shall be administered by the relevant tax authority and be funded from the respective accounts of Government into which revenue of each tax-type is remitted. No claim for refund of tax under this section shall be allowed unless it is made in writing within six years after the end of the year of assessment to which it relates.
"A taxable person who is eligible for a refund of VAT must submit a request for the service using the required form. When a taxable person makes a legitimate request, the Service will, within 30 days of receiving the request, either return the tax to the taxable person or allow the amount to be set off against the taxpayer's overall tax due.

"The net revenue accruing by the operation of chapter six of the Nigeria Tax Act shall be distributed as follows: 10% to the Federal Government; 55% to the State Governments and the Federal Capital Territory; and 35% to the Local Governments," the statement on value-added tax revenue distribution read. as long as 60% of the total amount standing to the credit of states and local governments shall be distributed among them on the basis of derivation.”