Senate prescribes stiffer penalties for tax evasion

The Senate has called for stiffer penalties against tax evasion, saying it will serve as a deterrent to defaulters.

The legislators noted that the stipulated penalty of N500, 000 for corporate bodies and N50, 000 for individuals should be increased to N5 million for corporate bodies and N1 million for individuals.

Coming through a Bill to amend the Personal Income Tax Act, Senate leader, Senate leader, Teslim Folarin disclosed that the Bill seeks to amend the Personal Income Tax Act to make it more responsive to the tax policies of the Federal Government and to enhance its implementation and effectiveness.

Folarin stressed that the Bill is structured to correct anomalies in the existing Act and to strengthen tax policies and recommend stiffer sanctions for tax evasion.

According to the bill, “A person engaged in banking in Nigeria shall prepare a return at the end of each month detailing the details of new customers of the bank. Failure to adhere to this, such a person will be liable on conviction to a fine of N500, 000 in the case of a corporate body and N50,000 in the case of an individual. This is against the old regime of N5,000 and N500.”

“The Bill makes it a serious offence for any person or body corporate who, being obliged to deduct tax, fails to deduct or remit the deducted tax within the stipulated period to the relevant authority”

“It also makes it mandatory for every employer to file a return with the relevant tax authority of all emoluments paid to its employees not later than January 31 of every year, and any employer who contravenes its provision shall be liable to a penalty of N500,000 in the case of a body corporate and N50,000 in the case of an individual.”

Folarin stated that the prescribed penalties were adjusted to reflect modern realities, adding that the new tax regime would enhance the revenue profile of the government and ensure that the government has more funds to provide critical infrastructure.

Senator Ibrahim Ida observed that the Bill is a right step in a right direction, and that if Nigeria gets this right this time, it will continue to get it right.

In his contribution, Senator Kati Bello said evaders should be made to pay five times the stipulated fine.

Senator Effiong Bob bemoaned the late presentation of the Bill, noting that it was coming at a time the tenure of the Senate is coming to an end.