November 30, 2023 – Sunmola David & CO

Key Information for 2022 PAYE Returns Filing.

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Filing PAYE returns for employers is a routine task, occurring annually in the initial month. According to Section 81 of the Personal Income Tax Act (PITA), employers are obligated to submit yearly returns that encompass the income disbursed to their employees, along with the PAYE deductions remitted to the relevant tax authorities on behalf of the employees in a given assessment year. This article delves into the crucial aspects of the PAYE returns filing process, a prerequisite before filing Personal Income Tax (PIT) returns. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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6 Key Points to Understand About Personal Income Tax (PIT) Filing.

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As the deadline for filing Annual Individual Personal Income Tax (PIT) Returns approaches on March 31, 2023, it is crucial to be well-informed and take the necessary steps to ensure compliance. According to Section 41 of the Personal Income Tax Act, 2011, Cap P8 LFN 2004 as amended, individuals are required to file their returns within ninety (90) days from the start of each year. Here are six important aspects to consider for a smooth PIT filing process: For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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TAX RELIEFS OUTLINED IN THE PERSONAL INCOME TAX ACT.

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In Nigeria, the Personal Income Tax Act (PITA) serves as the primary legislation governing the taxation of individuals, communities, families, trustees, and estates. Within the framework of the PITA, taxes are imposed on the total income of taxable entities, with certain exemptions detailed in the Third Schedule to the PITA, Items One and Two of the Sixth Schedule, or other pertinent sections like Sections 19 & 20. Examination of Tax Reliefs and Deductions: For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

TAX RELIEFS OUTLINED IN THE PERSONAL INCOME TAX ACT. Read More »

TETFund Unveils Comprehensive Intervention Plans for Public Tertiary Institutions in 2024.

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The Executive Secretary of the Tertiary Education Trust Fund (TETFund), Sonny Echono, has announced a targeted intervention initiative for public tertiary institutions in the year 2024. The disclosure came during an interactive session with the heads of more than 200 beneficiary institutions in Abuja, where Echono sought their input into the draft disbursement guidelines for the upcoming intervention cycle. Echono outlined the approved areas of intervention categorized into yearly direct disbursements and special interventions, emphasizing a commitment to enhancing the quality of tertiary education. Under the yearly direct disbursements, proposed areas of focus include the establishment of career centers for all beneficiary institutions and skills development programs tailored for polytechnics. For special direct disbursements, Echono highlighted plans to increase allocation and extend the number of beneficiary institutions for the Special High Impact Programme (SHIP). Additionally, the fund aims to provide hostels for selected beneficiary institutions, sustain disaster recovery efforts, enhance security infrastructure, allocate funds for research, establish central multipurpose laboratories, and support agricultural laboratories/farms, among other initiatives. Echono expressed satisfaction with the record-high collection of the Year 2023 Education tax, attributing it to the increased contributions approved by both former and current administrations. He commended the collaboration with the Federal Inland Revenue Service (FIRS) and urged its continuation for sustained growth in collection, aligning with the fund’s mission to fulfill the President’s commitment to the Nigerian people and advance the tertiary education sector for greater competitiveness and national development. Highlighting progress made in addressing issues identified in the previous stakeholders’ meeting, Echono emphasized achievements in research and innovation, academic staff training and development, as well as manuscript and book development in institutions. He outlined the disbursement process, indicating that funds would be allocated to universities, polytechnics, and colleges of education. In response, officials from the Ministry of Education, National Board for Technical Education (NBTE), and the National Commission for Colleges of Education stressed the importance of synergy to ensure TETFund delivers effectively on its mandate. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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FIRS Urges Compliance: Foreign Shipping Companies Must Adhere to Nigeria’s Tax Laws.

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The Federal Inland Revenue Service (FIRS) is calling on foreign companies engaged in shipping crude oil from Nigeria to ensure compliance with the country’s tax laws. Zacch Adedeji, Chairman of FIRS, issued this directive during a workshop on the taxation of non-resident shipping companies, organized in collaboration with the Oil Producers Trade Section (OPTS) in Lagos. Adedeji clarified that the tax compliance initiative, focused on foreign shipping companies involved in hydrocarbon transportation, aims to expand the tax net and boost revenue. He assured international companies that the agency’s intent is to enforce existing tax laws without disrupting their operations. According to Adedeji, Section 14 of the Companies Income Tax Act (CITA) 2004 mandates foreign companies engaged in shipping and air transport operations in Nigeria to file tax returns to continue operating in the country. He reminded companies of the six-month grace period provided for them to regularize their tax returns, ending on December 31 of the current year. The Chairman emphasized that the workshop’s purpose is to address challenges related to tax compliance by foreign companies and find lasting solutions. He highlighted the Federal Government’s target to increase Nigeria’s tax-to-GDP ratio to 18 percent within the next three years by broadening the tax net, without imposing additional taxes. Adedeji urged non-compliant international shipping companies to promptly adhere to Nigerian tax laws, emphasizing the importance of cooperation to achieve the government’s broader fiscal goals. Recognizing concerns from stakeholders in the oil and gas industry and the maritime sector, he affirmed the FIRS’s commitment to facilitating a smooth and effective tax compliance process for all parties involved. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

FIRS Urges Compliance: Foreign Shipping Companies Must Adhere to Nigeria’s Tax Laws. Read More »

Enhancing Fiscal Sustainability: Federal Government’s Strategy to Boost Tax Revenue through Stringent Law Enforcement.

Understanding and Adapting to the Industrial Training Fund (Amendment) Act 2011.

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The Industrial Training Fund Act (ITFA) became effective on October 8, 1971. Its purpose was to establish the Industrial Training Fund (ITF) to promote and encourage skill acquisition in Nigerian industry or commerce. This aimed to create a pool of trained indigenous manpower to meet the economy’s needs. The Act mandated the Council to provide or secure training, approve courses, consider special employment cases, and conduct or assist research in training matters. Employers were required to provide adequate training, with evidence forwarded to the ITF for refunds. Over four decades later, the ITFA struggled to make an impact due to implementation issues. Recent amendments, enacted by the Industrial Training Fund (Amendment) Act 2011, signed on June 3, 2011, and gazetted on June 22, 2011, aimed to address these challenges. Changes include empowering the ITF to appoint agents for audit and compliance enforcement. The threshold for employer liability reduced from 25 employees to a minimum of 5 employees or a turnover of N50 million and above per annum. Employers now contribute 1% of payroll by prescribed dates. The amendment requires entities bidding for government or private business to prove compliance. Regulatory agencies must ensure compliance, and free trade zone entities need proof for expatriate quota approval. The Minister of Industry, with Federal Executive Council approval, can vary contribution rates. The maximum refund for employers decreased from 60% to 50%. Penalties for non-compliance increased, with the power to waive penalties now vested in the Director-General of the Fund. The punitive section imposing a 5% monthly penalty on outstanding contributions was not amended, and the law’s late gazetting raises concerns about retrospective application including employers with 5 employees burdens micro-businesses. The N50 million annual turnover threshold may hinder the Fund’s training objective for shell companies with few employees but substantial income. Guidelines for refund claims, including a 2-week advance notice of training, are cumbersome, reducing benefits for employers. Overall, the amendments lead to increased costs for employers with diminished returns. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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LIRS Takes Stringent Action Against Non-Compliance: 34 Companies and 23 Hospitality Businesses Shut Down for Unsettled Tax Debts.

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The Lagos State Internal Revenue Service (LIRS) has enforced the closure of 34 corporate organizations and 23 establishments in the hospitality sector for their failure to remit Personal Income Taxes of employees and non-remittance of consumption taxes to the Lagos State Government, accumulating a total tax debt of over N356.12 million. In a statement released by Monsurat Amasa-Oyelude, the Head of Corporate Communications at LIRS, the Director of Legal Services, Mr. Seyi Alade, made the announcement during a state-wide tax law enforcement exercise conducted by the Service in Lagos. The affected companies include NTS Nigeria Ltd., Med-In Hospital & Pharma Services Ltd., Danvic Petroleum Int’l Ltd., Business Intelligence Technology, Avaya Nigeria Ltd., Gladstone Tech Ltd., Courier Plus Services Ltd., Kurioucity Ltd., Medilag Ventures Ltd., Future Oilfields, and Seven Six & Ten Limited, among others. Simultaneously, 23 hotels, restaurants, and event facilities were closed for failure to deduct and remit consumption taxes. These businesses include Blitz Suites & Hotel, Offshoroomz Hotel, God’s Grace Hotel, De Orange Place Ltd., De Santos Hotel, Kentade Hotel Limited, Chamcee, Chelsea Suites, Falode Hotels, High Climax Hotel, Chez Moi Apartment, Excellence Hotel, Bereans Venture (Tantalizer Ebute Metta), La Avril Hotel & Suites, De Orange Place Ltd., Milaco Guest House, New World Inn, Model Motels Ltd, Rely Maritime Ltd, 4 Seasons Hotel, Dream Land Hotel, 343 North Restaurant and Lounge, and Jade Palace Chinese Restaurant. Alade reported that the combined tax liabilities of these entities exceeded N356.12 million, causing a significant loss of revenue to the State Government. Despite the Service’s efforts to promote voluntary compliance, some businesses opted for tax evasion, leading to renewed enforcement activities. Emphasizing the primary goal of securing compliance with the remittance of Consumption and Personal Income taxes, Alade warned that failing to file tax returns or engaging in tax evasion would be considered criminal offenses, potentially resulting in financial penalties and, in some cases, custodial sentences upon conviction. The agency is actively prosecuting high-net-worth individuals and companies that failed to file their returns, with bench warrants issued and arrests made in specific cases, including Platinum Apartments & Suites, The Moonlight Place Enterprises, and Jezreel Nursery and Primary School. Alade concluded by stating that the enforcement exercise would continue as part of the Service’s commitment to upholding tax compliance across the board. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

LIRS Takes Stringent Action Against Non-Compliance: 34 Companies and 23 Hospitality Businesses Shut Down for Unsettled Tax Debts. Read More »

Lagos State Internal Revenue Service Implements Eco Fiscal System for Streamlined Hospitality Tax Collection.

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The Lagos State Internal Revenue Service (LIRS) has unveiled an advanced approach to collecting Hotel Occupancy and Restaurants Consumption Tax (HORCT) in the region. In a public notice directed at stakeholders in the hospitality sector, including hotel owners, event centers, restaurants, and bars, the Executive Chairman of LIRS, Ayodele Subair, introduced the Eco Fiscal System (EFS). This automated invoicing solution is designed to transform the process of collecting consumption taxes, aligning with LIRS’s commitment to enhancing convenience and compliance with tax laws. Subair emphasized that the EFS, an evolution in tax collection, aims to simplify payments and reduce errors associated with manual data entry. Businesses adopting the EFS can benefit from accurate calculations, as the system automatically applies relevant tax rates, saving time and resources. Additionally, the software ensures secure and efficient record-keeping, facilitating audits and minimizing compliance risks. “We aim to empower businesses with innovative solutions that boost operational efficiency and minimize compliance challenges. By entrusting tax compliance to our reliable and automated system, businesses can focus on their core operations,” stated Subair. He urged all operators in the hospitality sector to swiftly adopt the EFS, emphasizing that non-compliance would contravene provisions in the Hotel Occupancy and Restaurant Consumption Fiscalisation Regulation 2017. Failure to comply carries penalties outlined in the HORC Law 2009. Subair assured that the EFS is compatible with various e-commerce platforms and seamlessly integrates with existing accounting systems, ensuring a smooth implementation process. LIRS officials are committed to visiting establishments in the hospitality industry to integrate the software with existing systems and provide necessary assistance for a seamless transition to the EFS platform. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Lagos State Internal Revenue Service Implements Eco Fiscal System for Streamlined Hospitality Tax Collection. Read More »

15 NOTES ON NIGERIA’S UPDATED VAT E-FILING PLATFORM.

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Nigeria’s Federal Inland Revenue Service (FIRS) has implemented significant updates to enhance the Value Added Tax (VAT) compliance processes on its ICT-based tax compliance platform known as TaxPro MAX. The revisions impact Sales, Purchases, Sales Adjustments, and the VAT Returns Form. Below are 15 key notes elucidating the changes on the Platform and their implications for your VAT compliance process: A. Sales: B. Purchases: C. Sales Adjustment: D. VAT Form: E. Our Concluding Commentary: The Purchases page’s dependency on data from uploaded Sales Schedules poses a notable challenge for TaxPro MAX. While FIRS aims to fully automate the VAT filing process, effective stakeholder engagement, quick issue resolution, communication, and progressive updates are crucial. TaxPro MAX should be treated as a world-class Software as a Service (SAAS) platform, meeting high standards for efficient service delivery. Stakeholder feedback should guide impactful updates for a well-paced system. The FIRS and taxpayers should demand and uphold the best standards for TaxPro MAX as a service. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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