Tax preparation services

10 ways taxes come to your rescue that you probably take for granted: Shelter If you were raised or currently reside in public housing, you may have reason to thank the taxes you or others have generated for the relative freedom you enjoy from exorbitant rent. After all, you have no reason to contend with agency, caution or other fees that your peers understand as the price they must pay for a roof over their heads. But don’t be surprised if the government makes demands for a fraction of your income to make the same facility available to others in the short run. The National Assembly has just passed the National Housing Fund (NHF) Bill 2018 which seeks to impose a compulsory 2.5% deduction on your monthly income to secure funding for additional housing projects in the country. Healthcare Oftentimes, private hospitals lack the specialised skills or equipment to treat the ailments that strike when you least expect. In such cases, they refer patients to general hospitals across the federation for more specialised care. If you or yours have had occasion to receive healthcare at any public hospital to cut cost or for referral purposes, you should be a tax ambassador because some of those hospitals were built with revenue generated from taxes. Think what would have happened to you if none were just around the corner when it mattered. Mass transit At federal, state or local government levels, you may have been lucky to catch a bus that only cost a fraction of what you usually expect from commercial transportation during your commute to work or business. Your child probably had cheery news to share about how a big neighbourhood bus took her to school for free. It is called a mass transit system provided by the government, and don’t be surprised if it was funded with proceeds from taxes paid by you or others. Free Education Taxes may have come to the rescue if you are the product of a public school or federal/state university. Remember how fulfilling it was to pay as little as N25, 000 as your tertiary school fee when the parents of your counterparts in private universities literally gave an arm and a leg to meet up with tuition? The government is sometimes able to achieve a measure of subsidised education because several upstanding citizens exercise their civic duty to pay taxes. It wouldn’t hurt to join them so others can have the same story to tell. Education is a basic right, after all. Brand Nigeria If you are a business person dealing in locally-made products with money in your pocket by month end, you probably have taxes to thank. Government often imposes high taxes on foreign goods to encourage patronage of local products by the citizenry. This might sometimes leave you smiling to the bank when it matters. Good Roads Roads riddled with potholes leave us frantic and furious because they do not only damage our vehicles but are often responsible for the auto accidents that claim innocent lives on a daily basis. This explains why good roads should not be taken for granted. They are products of the taxes/alternative revenue sources, and fall into the category of social amenities we expect when the government is financially buoyant. Job Creation In a country with unemployment figures pegged at 23.1%, it is a privilege to be part of the gainfully employed workforce. But what you may not know is that job creation sometimes depends a lot on taxation. Case in point, your organisation may have been priced out of the market without tax waivers or holidays granted by the government to encourage investments and business growth, depending on the industry that engages you. Thinking about this should encourage you to pay your taxes. Income Redistribution Tax helps ensure social justice in the sense that it is pegged at a particular percentage of income, not a specific fee. As such, it creates a level playing field for all because the higher your income, the higher the tax margin deducted and vice versa. Security Just about every one of us would prefer to live and work in secure neighbourhoods. In fact, we have reservations with the response time of the Nigerian police force because we want them available round the clock for crime-fighting and other purposes. But keep in mind that your tax is one source of remuneration for the cops. As such, prioritising tax payment is one sure way of keeping them motivated so they will be better placed to perform their statutory duties when situation calls for it.   Source: Vanguard

The Central Bank of Nigeria (CBN) and the Federal Inland Revenue Service (FIRS) have taken opposing positions on revenue remittances by the latter to the Federation Account domiciled with the apex bank. Their disagreement emanates from a shortfall in revenue generated from Petroleum Profit Tax (PPT), Value Added Tax (VAT) and Company Income Tax (CIT), amounting to N26.703billion which the FIRS claimed it remitted to the Federation Account between December 2018 and January 2019. While the FIRS reported that N321.23 billion as total PPT and CIT collections for December 2018 was remitted to the Federation Account with the CBN, the apex bank’s component statement showed that N294.62 billion was received from FIRS during the period. The CBN figure showed a shortfall of N26.61 billion of the amount the FIRS claimed it paid into the account. The document, revealed that FIRS allegedly posted N199.16 billion as total PPT and VAT collections in January 2019 while the CBN component statement to the Federation Account Allocation Committee (FAAC) post-mortem sub-committee indicated that FIRS paid N199.07 billion, which was a shortfall of N90.88 million. The post-mortem sub-committee of FAAC which extensively deliberated upon the reason for the differences between the two agencies could not resolve the matter at its last monthly meeting held at the Board Room of Revenue Mobilisation Allocation and Fiscal Committee (RMFAC) on April 24, 2019. The committee, therefore, directed the two agencies to meet and reconcile their accounts and report back at the next meeting. The meeting was attended by representatives of RMFAC, commissioners of finance and accountants-general from the six geopolitical zones as well as representatives of some revenue generating and accounting agencies.     Source: Leadership

Nigerian workers always posit that “their take-home pay does not take them home.” Such is the tale of the Nigerian worker – who lives miserly because he earns poorly. The Federal government of Nigeria has now remarkably increased workers’ minimum wage. The government has hinted that it will increase Value Added Tax (VAT) to fund the new wage. This suggests that government has no sufficient funding for national expenses which spurs certain necessary logical inquires: Given that citizens pay taxes to fund public utility, then, what exactly gulps government’s spending? Has Nigeria maximised revenue potentials and why so, if not? Also, should VAT increase? Some countries have revenue problem, some others, have spending problem only. Nigeria has both. Additionally, Nigeria undergoes another third problem of a dangerously accelerating debt profile. Public debt accrues to N24.4trillion, presently. In three years only, external debt soared by $11.77bn at a percentile rate of 114.05 while over 50% of Nigeria’s revenue goes to debt servicing. The reality of a nation having to badly survive on borrowed money speaks volume of an ailing economy. For a stretched epoch, the dominant source of Nigeria’s revenue has been the crude oil. Once, the country accrued significant revenue through agriculture but the crude oil soon displaced it. Inescapably, a need arose to diversify income due to the volatility of oil prices globally. Government implemented tax laws and tax reform policies intermittently. VAT was introduced, FIRS launched electronic tax remittance system, recently, government established the Voluntary Assets and Income Declaration Scheme (VAIDS) through which it purposed to generate USD1 billion by waiving criminal prosecution and other penalties for taxpayers who willingly report undeclared income. Despite the reforms, nothing really has changed. Tax remittance is yet enmeshed in long-drawn-out procedures, tax laws and tax policies are disjointed and cumbersome, there is low tax education as a result, also, multiplicity of taxes and ultimately, revenue is yet low. VAT is charged at 5% presently, a rate which government has argued is low. But given Nigeria’s economic condition, there are no justifications to increase the rate. According to Steve Hanke, Nigeria ranks sixth most miserable country in the world, world poverty clock says more than 91 million Nigerians, close to half of the country’s population, live in extreme poverty and every one minute, six Nigerians become poor. VAT is tax charged on the purchase price of a commodity. With VAT increase, prices of goods and services are bound to soar and such decision would be ill-intended and detrimental. The therapy to the dwindling Nigerian economy is for the country to urgently refashion itself to become a competitive producing economy. Any nation must solve three basic life problems: what to produce, how to produce and for whom to produce. Need for goods and services cannot end. Nations which meet these needs acquire economic strength. During the period of oil boom, Nigeria garnered massive wealth, because it met the oil demand, even though in crude form. Notably, industrialisation fuels production because earth-moving vessels will outdo easily, cheaply and quickly too, what a hundred people will do manually. To gain technical know-how into the workings of complex machines and to be able to build new ones, human capital is essential. This is why qualitative education is non-negotiable for Nigerians. Education should be accessible for all and schooling curriculums should tilt towards technical and technological brainstorming. That way, Nigeria’s vast population would become its fortune. Taxation can even turn in more. strategic coalesce of the numerous tax categories would enhance simplified tax procedures and tax education. The law should also fully have a free course against tax evaders. Much as Nigeria needs revenue boosting, the country needs to be circumspect with spending; and this is a problem with both government and citizens. Enough of depleting foreign reserve by importing $18 million toothpicks yearly or $400 million tomato pastes or ridiculously continuing to import Pizza from the UK. The country has to drop the inglorious notoriety of running an expensive government at the expense of a meteoric debt profile. There is a limit to which any government anywhere in the world may forge ahead with an adverse policy under the guise that implementing such policy is in the best interest of the people. When President Macron of France declared that a climatic policy would inform fuel tax increase, the president’s popularity quickly declined, with citizens finding the tax policy unfavourable. In no time, rowdy crowd wearing Yellow Vets littered France in protest. Raising VAT to fund wage increase is mixed blessing and whether yellow vests or a yellow card, it will elicit a thumbs down from the Nigerian masses that are already bearing the brunt of economic hardship and need rescue.   Source: The Sun

Nigeria’s three tiers of government – federal, states and local government councils – shared N617.6 billion as federal allocations for March 2019. A communiqué issued by the Technical sub-committee of the Federation Accounts Allocation Committee (FAAC), at the end of its meeting in Abuja on Tuesday, said the gross statutory revenue received was about N446.6 billion. The figure is lower than the N478.4 billion received in the previous month by about N31.7 billion. Also, the revenue generated from the Value Added Tax (VAT) stood at about N92.2 billion, which showed a marginal decrease of about N4.2 billion from the N96.4 billion generated the previous month. There was also N653 million foreign exchange gain; about N13 billion from Foreign exchange Equalisation; N55 billion from Good & Valuable Consideration as well as N10 billion added by Nigerian National Petroleum Corporation (NNPC). The total distributable revenue for the month came to about N617.6 billion. Consequently, from the net distributable revenue for the month, the federal government received about N257.8; states, N168.3 billion; local government councils, N126.6 billion. The oil-producing states got N49.8 billion as 13 per cent derivation of mineral revenue.The cost of collection, transfer and Federal Inland Revenue Service (FIRS) Refund was about N 15 billion. Also, the distribution of the Value Added Tax (VAT) realised showed the federal government received N13.3 billion, representing 15 per cent; states, N44.2 billion or 50 per cent, while the councils got about N31 billion or 35 per cent. The breakdown of allocation from the statutory revenue generated showed the federal government took N208.4 billion or 52.68 per cent; states, N105.7 billion; councils, N81.5 billion. Other details showed the crude oil export sales increased by about 49.18 per cent due to the increase in lifting volume. This resulted in increased federation revenue by about $240.23 million. The average crude oil price increased from $63.62 to $79.06 per barrel. However, lifting operations were adversely affected by production shut-in, shut -down at various terminals due to technical issues, leaks and maintenance. The committee said there was also a remarkable increase in revenues from oil royalty; import and excise duties increased, while Petroleum Profit Tax (PPT) decreased significantly including Companies Income Tax (CIT).   Source: Premium Time

The nation’s tax system has been agog, at least in the last three years, than it has ever been in more than 10 years past. Riding on the back of the country’s fiscal crisis, the present administration, like “hunting without barriers,” raved up the campaign for honour to civil obligations. Granted, the campaign is yielding more positive results, according to experts, but they said there are cases of regulatory flip-flop, need for review of laws, leakages, lack of transparency in governance and fiscal indiscipline. The Chartered Institute of Taxation of Nigeria (CITN), at its just concluded yearly tax forum, outlined series of outstanding issues in the country’s tax system to be resolved in the week-long brainstorming sessions. Prominent among them were the unending dependence on oil and raging controversies over tax increase, expansion of tax net and introduction of new ones. The President and Chairman of Council, CITN, Chief Cyril Ede, in his welcome address, said the institute’s yearly conference was part of its contributions to resolving topical tax issues in the country, advance taxation as an essential tool for promoting macroeconomic goals of achieving full employment, income redistribution and competitive environment for businesses. “The role of taxation in the development and sustenance discourse cannot be emphasized enough. We are happy to engage this subject every time an opportunity presents itself, more so as we believe in its vast potential to deliver economic prosperity for our great country. “It is imperative to establish the fact that Nigeria still relies principally on oil revenue, which also accounts for a substantial part of our foreign exchange earnings. We owe it ourselves and generations unborn, to break away from this un-dimensional approach, which comes with its harvest of false affluence…” he said. Earlier in the conference, the Pioneer Chairperson of the Society of Women in Taxation (SWIT), Justina Okoror, had raised concerns over the lopsided developments in the pursuit of tax revenue, which put 70 per cent of the N5.2 trillion of the taxes collected in 2018 to Lagos State alone. The development, which is not only an indication that the four-year tax reforms and campaign have less impact in the remaining 35 states, with huge untapped potential, but a clear assessment that most of the states are not in tune with the message of taxation. “For instance, out of the trillions of naira generated by the Federal Inland Revenue Service (FIRS), 70 per cent came from Lagos, which means that 35 states and the Federal Capital Territory contributed only 30 per cent. “That also means that there are so many states with nearly no productive activities happening in them and by implications, are not paying tax. So, if Lagos decides to become a sovereign state, Nigeria will not be able to generate any revenue from tax,” she said. Stressing the need to expand tax base, she said that with some states mining gold, diamond and other natural resources, there is an urgent need for government to go into the hinterland and increase their revenue base, especially from private companies. “Government must take seriously tax revenue generation just like what is being done with crude oil. They should go into these places with natural resources and make it another revenue base,” she said. But the incoming National Chairperson of SWIT, Kudiirat Abdulhamid, queried government’s increased borrowing, when potential revenue generation is lying idly, saying the increasing obligations is tying the nation’s resources to payment and servicing of the loan that is being taken. She maintained that revenue generation through taxation is more sustainable, especially when such resources are judiciously tailored towards development projects that would benefit the people. “I agree with people complaining over government borrowing, but if citizens pay taxes and it is judiciously utilized for provision of this services, people will be eager to pay more. But when government borrows money without providing infrastructures, citizens would become angry,” she said. But transparency and governance issues were resonated, as President Muhammadu Buhari, admitted that government was aware that the challenges faced in achieving voluntary tax compliance was due to alleged lack of transparency and accountability in the management of revenue. Represented by the Permanent Secretary, Ministry of Finance, Mahmood Isa-Dutse, he said his government was committed to changing the narrative by ensuring judicious use of funds through the strict enforcement of Treasury Single Account policy and zero tolerance for corruption. He stressed that for Nigeria’s tax system to be dynamic and respond to the ever-evolving commercial landscape and increased technology-driven business model, he called for the support of the institute and other major stakeholders in widening the tax base for improved revenue collection and voluntary compliance. He also expressed concern over abysmal low level of tax to the Gross Domestic Product (GDP), reiterating government’s stance in setting aggressive target for increased tax collection in the country. According to him, tax collection supposed to grow in line with growth in the economy but that has not been the case in the country, attributing it to low-level compliance and in some cases, underpayment of the effective tax rate paid by those that are complaint. But the Chairman of United Bank of Africa, Tony Elumelu, asked government to expand its double taxation treaties with foreign missions, as part of efforts to increase its revenue base. Nigeria, according to him, has only 14 double taxation treaties despite the numerous foreign missions, embassies, high commissions in almost all the countries of the world, when South Africa has 80 taxation treaties. Elumelu said that government does not understand the benefit and implications of the treaties for national development, pointing out that to achieve a progressive, efficient and effective tax regime, there was need for government to take a second look into the double taxation treaties with other countries. But he lamented that most multinational companies are relocating from Nigeria to Ghana and companies that want to move into the country are discouraged because an average business in Nigeria provides for itself water, electricity, handles waste disposals, security,

Chairman, Heirs Holdings and Founder, Tony Elumelu Foundation, Tony O. Elumelu has called for far reaching Tax reforms and for the National Assembly to urgently pass the Executive Tax bill into law.  Elumelu made this statement as he delivered the keynote address at the 21st Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN), titled, “National Development: Unlocking the Potentials of Taxation”. Mr. Tony O. Elumelu CON, delivers keynote address at the 21st Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN), titled, “National Development: Unlocking the Potentials of Taxation. Speaking on the challenges that stifle small businesses, Elumelu quoted a young entrepreneur beneficiary of the Tony Elumelu Foundation, “The average business owner in Nigeria is a local government authority on his own because he caters for his own electricity with generators, he builds his own borehole, handles his own waste disposal, and the government can make his life easier by creating favourable tax policies that support SMEs.”  Elumelu also lamented the plight of SMEs at the mercy of the tax system revealing, “The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. In Hong Kong, it’s just 3. Multiple taxation remains a significant burden for SMEs and corporates operating in the country.” Elumelu continued: “With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system,” he said.  Permanent Secretary, Ministry of Finance, Dr. Mahmud Isa-Dutse; President, Chartered Institute of Taxation in Nigeria, Dr. Ikemefuna Nwobodo; Executive Chairman, Federal Internal Revenue Service,  Babatunde Fowler; Keynote Speaker and Founder, Tony Elumelu Foundation, Mr. Tony O. Elumelu CON;  and Chairman, Lagos Internal Revenue Services, Ayo Subair. With high cost of compliance, complex and costly business registration processes, many SMEs are choosing to remain informal, which in turn results in a low tax base and low tax contribution to GDP. “Nigeria’s tax to GDP ratio is only circa 6%, compared to far smaller populations like Rwanda at 16%. Imagine the economic transformation we can achieve as a country if we can move our Tax to GDP ratio by 10%. We will raise an additional $40billion in government revenue – identical to the sum of our foreign reserves,” Elumelu explained.  But it won’t be easy. Elumelu advised government to educate, inform and raise tax awareness, “Government should drive mass mobilisation of citizens – let citizens know why they need to pay taxes and give them the assurance that their tax will be properly utilised.” In addition he stated that, “government should employ the use of smart tax incentives to attract and incentivise local and foreign investors.” Elumelu also tasked the country’s ambassadors and embassies with a two year timeline to increase the number of double tax treaties between host countries and Nigeria.  “Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign Tax treaties with our  top 100 trading partners in the world.” Speaking as the leading proponent of entrepreneurship in Africa and an advocate for entrepreneurs, Elumelu charged government to put in place tax systems to encourage SMEs-— the engine for job creation in the economy. “Until there is a reduction in what SMEs pay as tax, elimination of multiple taxation, abolition of minimum income tax and excess dividend tax, it will be difficult for us to expand the tax base. It will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country. It will be difficult for us to have the citizens hold leaders accountable.” In conclusion, he reminded the National Assembly members of their mandate in office, “We must encourage government to pass the Executive Bill immediately. Let’s get the National Assembly to fulfil their obligation to society and pass the bill immediately, so we can start making progress”. Speaking in response to the presentation, Former President of the Chartered Institute of Taxation in Nigeria, Chief Mark Anthony Dike emphasized the urgency for the Executive Tax bill to be passed into law. He said: “Every year during the military regime, there was a Finance Miscellaneous Provision Decree aimed at looking at what has happened and review the areas that need to be amended. As they say, the taste of the pudding is in the eating. We may conceptualise, but in order to know the efficacy of a theory, we have to test it. Until the provision of the Executive order is tested, we cannot know how efficacious it will be.” Also present at the event were Dr. Ikemefuna Nwobodo, President, Chartered Institute of Taxation in Nigeria, Permanent Secretary, Ministry of Finance, Dr. Mahmud Isa-Dutse, Babatunde Fowler, Executive Chairman, Federal Internal Revenue Service, Ayo Subair, Chairman, Lagos Internal Revenue Services, Members of the council of CITN and the Auditor General of the Federation, Mr. Anthony Ayine.   Source: Proshare

Mr. Kola Babarinde is a consummate tax practitioner who has passed through the rigours of learning and career development to attain the Fellowship of the Chartered Institute of Taxation of Nigeria (CITN). He is the Chairman of the 21st Yearly Tax Conference of CITN, which kicked off today, in Abuja. In this interview with Assistant Editor, Finance and Economy, CHIJIOKE NELSON, he says germane discourses on national tax system are increasingly becoming topical and the institute would as usual, contribute its quota through the conference. What issues will form discussions in this year’s annual tax conference? This is the 21st edition of the institute annual tax conference. The first was held in Ibadan precisely in 1998. The main theme for this year conference is “National Development – Unlocking the potentials of taxation”. The importance of taxes to the political, economic and social development of any country remains a topical issue of discourse, especially, in terms of the infrastructure it is able to provide. Major economies, the world over, regard taxes as a hot topic with far-reaching consequences when left unattended. Taxation is a veritable fiscal tool by which government achieves its macroeconomic objectives. Other topics outlined for discussion during the conference include: are corporate governance and ethical tax behaviour, tax transparency-implication of international conventions and agreements, taxation and ease of doing business, tax defaults; options and choices, global tax transformation: implication for economic growth and development, tax payers expectations and government responsibilities and lots more. How has government treated previous communiqué of the annual tax conference? Government has been responding positively to the Institute communiqué. The present government is more interested in taxation than any other sources of revenue generation. It has come to realize the importance of taxation as a sustainable source of revenue particularly, the recent instability in oil price and discoveries of oil by other nations of the world. Furthermore, taxation uses are broad and also serve as a catalyst for boosting capacity for sustained growth. Between tax rate increase and getting more people into the tax net, where do you stand? I am an advocate of widening of tax net. That is, getting more people into tax bracket will ultimately be better than increasing tax rate that will eventually translate to high cost of price of goods and services. It is a known fact that cost of living is very high in the country, and an average Nigerian provides water, electricity, roads, security, among other things, for himself. Any attempt to increase tax rate whether Value Added Tax, Company’s Income Tax or introduction of new tax under any guise, will further worsen situation for the citizen. Has government responded appropriately to issues of yearly tax law review, as recommended by previous conferences? With all sense of modesty, the institute’s input in the Personal Income Tax Amendment (PITAM) Act 2011 and National Tax Policy for instance, attests to this fact. Besides, the Institute has been enjoying good relationship with the governments at various levels. Government needs to do more in this regard though; the process of making laws takes time, this may actually result in delay in yearly review of tax laws. Nonetheless, there are laws that are either final or presidential assent stage. I, as a person, believe that the creation of Taxation Committee as a distinct committee of the two National Assembly chambers will further strengthen tax laws and improve its reviews. In your estimation, did returns from tax amnesty justify the huge campaign? Yes. Indeed, the end justifies the means. Firstly, it has increased tax net. For instance as a result of Voluntary Assets and Income Declaration Scheme (VAIDS), a lot of tax evaders used the opportunity provided to regularize their tax positions without paying penalty and interest. This in turn increased taxpayers base in the country. Secondly, money, hitherto lost to tax defaulters, was recovered by the government through VAIDS. Thirdly, it has led to improved tax compliance and awareness among the Nigerians within and outside the country. How sure are you that issues will be thoroughly discussed to enlighten participants? Seasoned facilitators and discussants in the field of taxation, fiscal policy and economic issues both within and outside are coming to present and discuss papers during the conference. The lead paper is going to be delivered by Mr. Tony Elumelu, CON. What are the side attractions? We have hospitality night where the Institute district societies from the 36 States and Abuja will be making presentations in dance, play, among others. Also, there will be various sporting games such as draft, ludo, ayo olopon, long tennis, three-kilometer walk and novelty match. The climax is Gala Night on Friday, with a life band on stage. In recent years, annual conference has been held more in Abuja. Is there any special consideration? Abuja, apart from being the federal capital territory, it is more central in terms of location. Besides, it is the seat of government officials who need to participate in the event. Where are we getting our tax policy wrong- Framework or implementation? I will like to respond to the question from both ends. We need to get the right people involved at the formulation stage (framework) and also during implementation to ensure that the intent of the laws would be achieved. Our tax laws are bedeviled with ambiguities and inconsistency. This of course, creates interpretation problems and more often than not, provide avenue for manipulations.   Source: Guardian