July 4, 2019

The Rivers State Internal Revenue Service has warned professionals and artisans operating in the state to avoid mistaking their professional fees and dues for state taxes and levies. RIRS Chairman, Mr Adoage Norteh, who issued this warning during a two-day interactive session with professionals and artisans in Port Harcourt, the capital, explained that professional fees and levies were meant for their unions, taxies and levies were meant for the development of the state. Norteh pointed out that while taxes to the state remained compulsory and defaulters could be arrested and prosecuted, the same could not be said of professional dues that are paid to professional bodies or artisan associations. He also said it was wrong for unions to collect taxes from their members and pay to the RIRS, adding that such act was unacceptable. He said, “Taxes are not union or association dues. When we talk about payment of tax; it is one that is compulsory for everybody that is qualified to pay tax. “There is a big difference between association dues like professional fees and state taxes. We must not mistake one for the other. “Again, some unions want to collect taxes from their members and pay to us, this is not acceptable. The unions and professional bodies are not tax assessors.” Norteh also urged tax payers to avoid paying taxes through anybody, adding that taxes were to be paid into a recognised state account by tax payers. He added, “It is expected that you as a tax payer must find out the source of a tax before you pay. Don’t pay cash to anybody; pay to a recognised account of the state.” The RIRS chairman also dismissed the belief in some quarters that collecting taxes would drive away businesses from the state, adding that habitual tax evaders were always at the forefront of criticising government. He urged those, who were unfairly assessed in the area of tax payment, to object and seek reassessment within 30 days of getting such tax evaluation. In his remark, a professional architect, Mr Asombe Egwuonu, observed that some of the tax demands in the state were high, adding that some persons could decide to operate from their homes if the situation did not change. Egwuonu, however, thanked RIRS for organising the interactive session to sensitise the people to a new tax regime in the state.   Source: Punch

The Tax Appeal Tribunal, South East Zone yesterday ruled that gratuities are tax exempted under the Personal Income Tax Act (PITA). Nigerian Breweries PLC in 2017 filed an appeal before the tribunal challenging the decision of the Abia State Board Internal Revenue to tax gratuities paid to its employees, contending that the Abia government erred when it assessed its employees to tax on gratuities paid by them. It argued through its counsel, Moshood Olajide that gratuities were no longer taxable, and therefore, remained the extant position in the PITA 2011 (as amended) and urged the tribunal to discharge the assessment notice issued by the respondent and declare that by virtue of Decree 1996, all gratuities in tax are exempted. But, Abia state government through its counsel, Obike Onyemeru urged the tribunal to dismiss the appeal and sustain the demand notice. Delivering judgment in the appeal, the three-man panel of tribunal agreed with the submissions of the appellant and resolved the three grounds in his favour. Chairman of the tribunal, Chukwuemeka Eze who read the judgment cited the decision of the supreme court which held that “it has been settled principle of statutory interpretation that although schedules of a statute can be useful handmaid in construing the provisions of a statute, they cannot however be interpreted to over-rule the plain words in the body of the statute,” and held that Paragraph 18(b) of the 3rd Schedule to the PITA does not apply to the appellant.   Source: Guardian