(Ecofin Agency) - Nigeria’s ministry of finance has announced that the interest rate on unpaid taxes will be increased by 5% over the Minimum Rediscount Rate, which is a benchmark lending rate. The measure which will be effective starting from July 1, 2017, aims to discourage companies and individuals from paying taxes late.

“The review of the interest rates on unpaid taxes was one of the necessary measures adopted by the Federal Government to enhance tax compliance, minimize tax evasion and deter late payments,” the finance ministry said in a statement released on Monday.

In the same framework, Africa’s most populous nation wishes to improve tax collection as it aims at raking N350 billion ($1.15 billion) tax revenues per year. The government has in fact proposed to increase tax on luxury goods from 5% to 15%.