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Mr. Babatunde Fowler, Chairman, Joint Tax Board (JTB) and Federal Inland Revenue Service (FIRS), explains to select journalists, how the new tax identification number registration system, scheduled for launch on Monday, will bring convenience to the taxpayer, boost tax compliance and revenue collection. Olaoluwakitan Babatunde was there There is a plan by the Joint Tax Board, which you chair, to introduce a new a New Tax Identification Number (TIN) Registration system. What is this about? We call it a new TIN Registration process and will be launched by the Vice President on 1 July. Before now, we have had people undergoing training on how to utilise this. And what this system basically does is to take information already in our system plus what we have in our national tax database. So once it is launched, we have to run it and have it come on the national database for the whole nation, both for companies and individuals. What this implies is that if you have a tax clearance in Kano State, for example, and you are coming to Lagos for transaction, instead of the man in Lagos confirming your tax clearance documents that you brought from Kano, he only needs to click the button and everything shows live. That is what the system does. The system brings innovation, convenience and transparency to tax authorities and taxpayers by enabling tax authorities efficiently manage their taxpayer base, while enabling taxpayers to view, retrieve and update their tax profiles at the comfort of their homes or offices. The new JTB TIN will be universal throughout the country and can be used by taxpayers to pay for any tax type. This reduces the burden of having to register for multiple TIN numbers from different tax authorities and states, as it lever ages on the biometrics we’ve got on BVN, from tax agencies, the Corporate Affairs Commission (CAC) and National Identity Management Commission (NIMC). So it brings in all onto a common platform. It also notifies taxpayer through a robust and secure system-to-system integration. What are the benefits to tax authorities? Clearly, the benefit would be convenience and transparency. If you are resident in one state and you go to transact business in another state, say, quote for a contract, it is in the law that part of the criteria is to have a tax clearance certificate. Immediately, an officer in the ministry will check if the individual name or your company name and your tax data are clearly are available. On the other side, if you have underpaid, like you paid a N100, 000 in Ogun State and you want to buy a property in Lagos for N10 million, the man clicks the button and asks how you can afford a N10 million property in Lagos based on the income on which you paid a tax of N100,000. So basically, it is a situation that is open and provides the taxpayer and the tax administrator with the same knowledge. So, it is not a matter of you trying to tell the tax official I pay adequate tax or for the tax official to demand inducement for tax clearance. How much trust can the taxpayer have in this new system and does it completely remove the need to physically visit tax offices? You don’t have to because we do all these things online. Now when you talk about trust, basically what the system does is to keep all your tax payments. And that currently operates in Lagos, which is one of the few states where it operates. Any payment in Lagos State, for example, over the last five years or six years, is available at the click of a button. This is what we have done with this new system.   So even for some states that do not have the capacity of the financial muscle to do it, we have put it all together in one place. So, once you key into that system, you have the same benefit as the taxpayer.   Source: This day

The deadline for filing of income tax and transfer pricing (TP) returns with Federal Inland Revenue Service (FIRS) is fast approaching for corporate taxpayers whose financial year-end is 31 December. The Companies Income Tax Act (CITA) and Income Tax (Transfer Pricing) Regulations 2018 (the TP Regulations) require corporate taxpayers to file annual companies income tax (CIT) and TP returns within six (6) months after their financial year-end (i.e., due date for filing). Failure to do so attracts administrative penalties. While the penalty for failure to file CIT returns on the due date is ₦25,000 for the first month of default and ₦5,000 for each subsequent month, the penalties for failure to file TP returns on the due date have been revised upward as follows: Failure to file the TP declaration form (if applicable) within the stipulated time attracts a penalty of ₦10 million for the first month of default and ₦10,000 for every day the failure continues. Failure to file the TP disclosure form within the stipulated time attracts a penalty of ₦10 million or 1% of the value of the controlled transaction(s), whichever is higher, for the first month of default and ₦10,000 for every day the failure continues. CITA and the TP Regulations allow taxpayers to apply for an extension of the due date for filing of their CIT and TP returns, respectively, where they are unable to meet such due date. While taxpayers are only required to show good cause when applying for an extension of the due date to file TP returns, taxpayers are required to meet certain stringent conditions when making an application for extension of the due date to file CIT returns. However, it should be noted that the grant of extension of the filing date is solely at the discretion of FIRS. In view of the above, taxpayers are advised to ensure that their CIT and TP returns are filed at their respective tax offices on or before 28 June 2019 in order to avoid the administrative penalties.   Source: Mondaq

The Chartered Institute of Taxation of Nigeria has elected new officers to steer the affairs of the th Institute for the next two years. Following the successful conduct of the 27 Annual General Meeting of the Institute, the leadership baton of the Institute was officially passed on to Dame. Gladys Olajumoke Moyosoreoluwa Ayinke Simplice, by Chief (Dr.) Cyril Ikemefuna Ede, FCTI, who has immediately taken over the position of the Immediate Past President. Dame Simplice was unanimously elected the 14th President of the Institute at an Extra-Ordinary Council Meeting held at the Secretariat of the Institute. Other elected officers of Council included: Mr. Adesina Adedayo, FCTI – Vice President, Barr. Samuel Olushola Agbeluyi, FCTI – Deputy Vice President and Mr. Innocent Ohagwa, FCTI was elected as the Honorary Treasurer. Dame Gladys Olajumoke Simplice started her academic career at Araromi Baptist School, Moloney, Lagos while her secondary education was at the Methodist Girls High School, Yaba, Lagos and Premier Grammar School, Lafenwa, Abeokuta. She commenced her Higher School Certificate (HSC) with Adeola Odutola College, Ijebu-ode and finished at the Saint Gregory’s College, Obalende, Lagos. Thereafter, she proceeded to Ahmadu Bello University, Samaru, Zaria where she graduated with a B.Sc in Economics. Dame Simplice commenced her tax career with the Federal Inland Revenue Department, (now Federal Inland Revenue Service) and retired after 27 years of a fulfilling and meritorious service. Due to her diligence during her service years, she was given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. She made a lot of improvement in the Department and initiated the idea of a Revenue Museum which is still a work in progress at FIRS.   Source: Sun News

A total of 42 tax-related disputes worth N288.1bn have been resolved by the Tax Appeal Tribunal within a period of eight months. The Coordinating Secretary of TAT, Mr Mohammed Abubakar, gave the figure in Abuja at the opening session of a two-day retreat on effective and efficient tax dispute resolution in Nigeria. Apart from the N288.1bn, he said disputes worth $5.41bn had also been resolved by the Tribunal. The Tribunal is one of the windows provided in Nigeria’s tax administration system, which offers an aggrieved party the opportunity to explore other dispute resolution mechanisms before gaining access to the law courts. Among other things, it helps to reduce the caseload of the over-laden regular courts by providing less formal fora for quicker, cheaper and expert resolution of tax disputes in the public interest. The Tax Appeal Tribunal was established pursuant to Section 59 (I) and the Fifth Schedule of the Federal Inland Revenue Service (Establishment) Act, 2007. Giving a summary of its activities from inauguration in November last year till date, Abubakar said the tribunal inherited 215 pending appeals with a disputed tax value of N607.53bn, $13.52bn and €1.48m. He said new appeals filed between November 2018 and June this year stood at 62 with disputed tax value of N71.7bn and $19.5m. He said, “Appeals resolved mutually or through judgement are 42 with a disputed tax value of N288.1bn, $5.41bn. However, it is pertinent to note that some of the resolved cases are at various stages of settlement or recovery while some might probably go on appeal at the Federal High Court. “Appeals struck out for other reasons such as lack of diligent prosecution or discontinuance by parties are 66 with disputed tax value of N22.03bn and $1.06bn. “Total number of appeals pending at the various zones and at various stages of hearing and determination are 165 with disputed tax value of N309.8bn, $10.21bn, €1.407m.” Out of the pending cases, he said 31 were either reserved for judgement or awaiting the filing of terms of the settlement. “We are hopeful that the 31 appeals would be concluded this month,” the TAT coordinating secretary explained. With regards to its key achievements, Abubakar said the TAT had engendered smooth commencement and sustained sittings across the zones. He added that there had been improved public enlightenment and stakeholder engagement, which had resulted in the gradual acceptance of the Tribunal by taxpayers. “We will keep working on improving the infrastructure to support speedy resolution of disputes brought before the Tribunal” he added. The Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse, said the Federal Government, through the Tribunal, had been able to restore taxpayers’ confidence in the nation’s tax system. He called on the tax commissioners to put in more efforts in the area of speedy resolution of tax-related disputes in order to ensure that tax revenue due to the government were paid on time. Represented at the event by the Permanent Secretary, Special Duties in the ministry, Mohammed Dikwa, he urged participants to use the workshop to identify the enablers that would assist in reforming the TAT for effective and efficient tax dispute resolution in Nigeria.   Source: Investor King

The Tax Appeal Tribunal, South East Zone, has declared that gratuities payable to pensioners are tax exempted under the Personal Income Tax Act (PITA).  The tribunal made the declaration while delivering judgment in appeal brought before it by Nigerian Breweries PLC in 2017, challenging the decision of the Abia State Board of Internal Revenue for taxing gratuities paid to its retirees. Nigerian Breweries in the suit No. TAT/SEZ/002/17 set out three grounds of appeal. “That Respondent Abia State Board of Internal Revenue (ASBIR), erred in law when it assessed the Appellant’s employees to tax on gratuities paid by the Appellant.” NB through its Counsel Moshood Olajide contended that under the finance (Miscellaneous Taxation Provision) No. 2) Decree 1996 amended section 3(1)(b) of PITA 1993 by deleting gratuities as income chargeable to tax, that by the clear wording of the 1996 Decree, gratuities is no longer taxable, and therefore, remains the extant position in the PITA 2011 (as amended). He therefore urged the Tribunal to discharge the assessment notice issued by the Respondent and a declaration that by virtue of Decree 1996 all gratuity are tax exempt. But, the Respondent through its Counsel, Obike Onyemeru, urged the tribunal to dismiss the appeal and sustain the demand notice. While he argued that there was no law expressly exempted gratuity in excess of N100,000 from tax, he contended that item 18(b) of the 3rd schedule to the PITA, CAP P. 8 LFN, 2011 (as amended) has not been repealed and remains the extant law. Delivering judgement in the appeal the three-man panel of tribunal agreed with the submissions of the Appellant and resolved all three grounds of appeal in its favour. The Chairman of the Tribunal, Chukwuemeka Eze, who read the judgement 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.” The Tribunal therefore, held that Paragraph 18(b) of the 3rd Schedule to the PITA does not apply to the Appellant. It said: “The stand of the law before the charging section captured in section 3, PITA of 1993 was that gratuities were chargeable under section 3 PITA. That PITA of 1993 did not provide for exemption of gratuities from personal income tax. The remedy provided by PITA 2004 was the deletion of gratuities from the charging section of PITA of 1993 in order to cure the mischief. “So, by applying the mischief rule of interpretation, the same result ensues, that is: gratuities are tax exempt under the extant Personal Income Tax. Therefore, the Tribunal is resolved in favour of the Appellant. “Consequently, an order is hereby made discharging the revised assessment notice issued by the Respondent to the Appellant on April 24, 2017.”   Source: Today

Rivers State Internal Revenue Service (RIRS) has set July 1, 2019 as a final plan and rollout date for the rollout of the state’s much-talked about informal sector tax drive. The state has also completed tax delineation of the state into tax zones. The executive chairman of the RIRS, Adoage Norteh, who broke the news weekend at a full meeting with stakeholders at the Hotel Presidential, Port Harcourt, said the Nyesom Wike administration had made it clear in launching the tax drive in the informal sector. The executive chairman said he was determined to make Rivers State move into informal tax regime without violence and chaos. He announced the formation of a committee to join the RIRS and review the policy and make suggestions. Speaking at the meeting, Norteh told the over 300 tax group leaders that the market and business unions would help to make the drive seamless and without rancour. He said the members would represent the opinions of the informal business people and may help in collection by submitting list of their members. He announced that the union leaders might get some commission for their effort instead of giving the money to tax consultants. He however made it clear that the RIRS would not concede the task of tax assessment and collection to touts or untrained groups. He asked for collaboration instead. The RIRS at the meeting forged an alliance with trade groups to fight touts. Norteh said he was determined to reduce or eliminate revenue touting in the state. He marvelled at the lamentations of groups who recounted encounters with touts that had since printed RIRS receipts and collected money in the name of the government using youth bodies, councillors and others. He educated them once again on critical issues that bring friction between the tax authority and taxpayers. He said directors of tax were only on salaries and not the profit made by the company, which must be taxed too. He warned against under-declaration of income, saying there were many other ways of discovering the truth because of red flags, and made it clear that though religious houses do not pay tax but their operators must be taxed for incomes they personally take home. Some stakeholders made contributions but many urged RIRS to continue the tax education. Speaking, the president of the Port Harcourt Chamber of Commerce, Industries, Mines and Agriculture (PHCCIMA), the chief, Nabil Saleh, said Norteh has done exactly what has been lacking. Youths made presentations and demanded to be involved in the drive but the RIRS boss explained that the agency raises money which the state government spends to develop the state.   Source: Business day

The Chartered Institute of Taxation of Nigeria, CITN, has berated firms and government agencies for tax default. Ikemefuna Ede, President, CITN, expressed concern over an audit report indicting the National Assembly and some government agencies over tax default. Speaking during the annual general meeting of the institute, Ede said the development was “worrisome” and contradicted government efforts in enforcing compliance from individuals and corporate organisations. “Of momentous concern to the institute was the revelation from an audit report by Auditor-General of the Federation submitted to the National Assembly in 2018 that the Presidency; both chambers of the National Assembly; the Economic and Financial Crimes Commission; and over 100 other ministries, departments and agencies defaulted in remitting various taxes, including VAT and withholding taxes deducted from their contractors and PAYE of their members of staff.” Ede, however, expressed satisfaction at the financial position of the organisation. Samuel Agbetuyi, treasurer, CITN, presented the 2018 financial position at the meeting. The finances showed that the professional tax body grew its total income by 43 percent from N399 million in 2017 to N570 million in 2018. The breakdown showed that the organisation recorded 62 percent increase in membership fees from N167.361 million to N270.6 million, while self-financing programmes had an increase of 40 percent from N172.95 million to N242.566 million between 2017 and 2018 respectively. In the year under review, however, it experienced dip in the money market, especially on treasury bills and fixed deposit, resulting in “significant fall in the investment income representing 33 percent decrease”. The total expenditures for the year under review showed the organisation incurred 28 percent increase over 2017.   Source: Real news Magazine

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