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The Federal Inland Revenue Service (FIRS) has announced it is collaborating with Central Bank of Nigeria to crack down on tax evaders.

Under the plan, companies who don’t pay taxes will not be able to access banking facilities. FIRS is also looking at raising Value Added Tax (VAT) to 10 percent.

FIRS Chairman Sunday Ogungbesan told a news briefing in Lagos that there were more than 440,000 companies in the country but only about 120,000 paid taxes.

He said it was difficult to track the financial activities of those who did not pay taxes. Most defaulting companies claim they were inactive.

"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 Mr. Ogungbesan.

He said Nigeria needs to review tax laws to make them more stringent. Tax evasion in Nigeria can be punished with up to five years in prison.