The Pacesetter Frontier Magazine

Tag: tax

  • FG Reduces Interest Rate On Late Tax Payments From October

    FG Reduces Interest Rate On Late Tax Payments From October

    Precious Nwonu, Enugu

    The Federal Government has introduced a new tax administration order that will reduce the interest charged on late payment of taxes from October 1, 2026.

    The Nigeria Tax Administration Order 2026 was signed by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, according to a statement by the Federal Ministry of Finance.

    The order was issued pursuant to Section 65 of the Nigeria Tax Administration Act, 2025, which provides for interest on tax liabilities that remain unpaid after the due date.

    Under the new framework, the interest rate for taxes payable in naira will be linked to the Central Bank of Nigeria’s Monetary Policy Rate, with an additional one percentage point.

    Oyedele explained that the new rate represents a reduction from the previous five-percentage-point spread.

    However, the applicable interest rate will not fall below the yield on 364-day Nigerian Treasury Bills, reflecting the government’s cost of borrowing when tax payments are delayed.

    For tax liabilities denominated in foreign currencies, the order sets the interest rate at the Secured Overnight Financing Rate, a benchmark for US dollar borrowing, plus six percentage points.

    The order further provides that if SOFR is discontinued, its officially recognised successor rate will be used.

    The Nigeria Revenue Service has been directed to publish the applicable interest rates on its website by the third business day of every month.

    The minister said the new system would give taxpayers greater certainty about the financial consequences of delaying tax payments while ensuring that late payment does not become a cheaper source of financing than borrowing from the market.

    Oyedele said the reform was also designed to promote fairness and predictability in tax administration by ensuring that taxpayers know the applicable rates in advance.

    The new rates will apply to interest accruing from October 1, 2026, including interest on tax liabilities that became due before that date.

    However, interest that accrued before October 1 will remain subject to the rules applicable at the time, where specifically provided for under the previous regime.

    The 2026 order replaces the 2017 notice on interest charged on unpaid taxes, as well as other earlier notices dealing with the same subject.

    The reform does not alter the 10 per cent penalty for late payment prescribed under Section 65 of the Nigeria Tax Administration Act.

    Tax authorities will also retain the power under Section 66 of the Act to waive penalties or interest where sufficient grounds are established.

    Oyedele urged taxpayers to file their returns and settle their tax obligations on time, while advising those with outstanding liabilities to make payments promptly or engage the relevant tax authority to address their obligations.

    The minister also encouraged taxpayers to regularly check the Nigeria Revenue Service website for the monthly applicable interest rates.

  • ASUU Demands Increase in Education Tax from 2.5% to 10%

    ASUU Demands Increase in Education Tax from 2.5% to 10%

    The Academic Staff Union of Universities (ASUU) has asked the federal government to increase the Education Tax from the current 2.5 per cent to 10 per cent to enable Tertiary Education Trust Fund (TETFund) to mobilise more funds to adequately address the decay and challenges confronting the tertiary education sub-sector.

    This came as the federal government made a public presentation of 50 new textbooks published by Nigerian authors under the sponsorship of TETFund.

    Minister of Education, Malam Adamu Adamu, who unveiled the textbooks in Abuja, said the publications would end the dominance of foreign academic materials in the nation’s educational institutions.

    ASUU President, Comrade Emmanuel Osodeke, who is attending such public functions in recent times as a result of a lingering face-off with the federal government, described TETFund as a brainchild of the Union.

    While commending the agency for transforming the nation’s higher education sub-sector, Osodoke called for an increase of education tax from the current 2.5 per cent to 10 per cent to enable TETFund to improve its intervention in the tertiary education sub-sector.

    He decried the poor attitude of some big companies and wealthy Nigerians on the payment of education tax, saying there was a need to reposition and expand the education tax net to bring about more resources for tertiary education institutions.

    Adamu, who was represented by the Minister of State for Education, Goodluck Nanah Opiah, said: “Overtime, Nigeria’s tertiary education institutions became dependent on books published outside the country with the attendant consequences of the herculean processes and unfavourable foreign exchange rate.

    “It is equally worrisome that the quality of most academic publications in our country leaves much to be desired. It is therefore expected that nourishing the culture of quality authorship and the production of indigenous books will not only ensure the availability of relevant books in the diverse subject areas taking cognisance of our local environment and sensitivities but will also safeguard national pride and reduce the demand for foreign exchange.”

    The minister, who commended TETFund for the publications, challenged the agency and authors to also produce books in the nation’s indigenous languages.

    “I also charge TETFund and the academia to go beyond publishing in the English Language to promoting authorship in our local languages in line with the recently approved National Language Policy,” he said.

    On his part, Executive Secretary of TETFund, Arc. Sonny Echono, commended the authors, TETFund’s Technical Advisory Group (TAG) and others for the publication of the 50 new textbooks.

    “TETFund is committed to doing this. TETFund has set a minimum target of 50 textbooks per year. I am sure that TAG will also surpass our expectations,” Echono said.

    The TETFund boss also assured that the newly published books would be distributed to tertiary institutions’ libraries at no cost.

    “All the books we have published so far, the initial publications are going to be distributed to the libraries of our tertiary institutions free of charge. It is the subsequent publications that students will be buying or other researchers will buy.

    “We are also going to help them because the ministry has established an education cloud, we are digitising our thesis and records, and through that ecosystem, you are going to have digital copies of these materials. All we are going to do now is to ensure we will protect the authors’ intellectual property rights and once that is done, they are going to be available on the internet,” Echono said.

    On the ASUU President’s clamour for a 10 per cent education tax, Echono said: “I am aware the current administration has done a lot in this regard. Mr. President in just two years has taken two bold steps, I know there is a degree of pushback from industries, from NECA about the issue of multiple taxations and the difficult operating environment, but seeing how important education is to national development, this President on two occasions; last year it was increased from 2 to 2.5 per cent and in the current Finance Bill, Mr. President has ensured that it is increased to 3 per cent.

    “I don’t want to preempt until it is signed, but that shows the commitment of the President that wants to leave a legacy.

    “Everyone knows that what is happening in most tertiary institutions is through the instrumentality of TETFund so increasing TETFund funding will go a long way in achieving that, whether we can go to 10 per cent currently is a conversation that will be held somewhere else.”

    (This Day)

  • FIRS: We cant fund 2022 budget because Nigerians evade tax

     

    The Federal Inland Revenue Service (FIRS) has claimed that the Federal Government would be hampered in funding the N16.9 trillion 2022 budget because Nigerians were not faithful in tax remittances.

     

    Chairman of the agency, Muhammad Nami, in a television interview, yesterday, said only N4.2trillion was collected as taxes in nine months, a figure he said, was insufficient to fund the budget presented to the National Assembly last week by President Muhammadu Buhari.

     

     

     

    He said were Nigerians tax payers acted as envisaged, the country would have generated sufficient funds to execute the N16.9 trillion budget.

    He said government was having challenges with the oil sector, and that from the N4.2 trillion collected in nine months, N3.3 trillion came from non-oil related taxes, while the balance N950 billion came from oil related taxes.

     

    “What is happening now is an issue of attitude and a reflection of what we are. Nobody in the oil or non-oil sector wants to pay tax. We do know that there are challenges in the oil sector, but that will open up in another discussion. Because of our tax paying culture, we haven’t been able to get much from some of these companies, but with the technology that we are going to deploy, we will be able to monitor everything these companies do. We will do tax assessment, collection, accounting and also enforce tax administration, that is one of the major breakthroughs we got from the 2020 Finance Act, so that going forward, every company would be able to pay the right taxes.

     

     

     

    “We now have the power to monitor tax incentives and monitor businesses that will operate in export processing zones. We have generated N3.3 trillion from non-oil taxes alone, and if all things were equal, the oil taxes used to account for over 55 to 60 per cent of the total taxes that FIRS used to collect in the past. If everything were to be okay, we should have been talking about N7 trillion already because if the non-oil is already at N3.2trillion and it used to be about 40 per cent in a year in some cases, and if it is at a level we want it to operate, Nigeria would have been better for it.

     

    “Above all, this is a confirmation of the fact that Nigerians do not like paying taxes. If we were to be paying taxes, we would have been able to generate enough money to be able to fund a N16.9 trillion budget that was submitted to the National Assembly last week by the President. Why did I say Nigerians are not paying taxes, and the other sector is not cooperating at a level that we ordinarily should be? I said at the budget presentation, Saudi Aramco, the NNPC equivalent in Saudi Arabia, generated over $50 billion, which is over N20 trillion far more than we require to fund a budget of over 200 million people,” he said.

     

    He also revealed that the FIRS will pay more attention to taxes that it claimed have been ignored for long.

     

     

     

     

    Source: www.sunnewsonline.com