Tax preparation services

PwC Nigeria has said the deployment of technology will help Nigeria to reduce tax compliance costs in order to encourage more people to pay taxes. The Head of Tax, PwC Nigeria, Mr Taiwo Oyedele, spoke on Tuesday in Lagos on the sidelines of the firm’s Tax Academy, with the theme ‘Technology and tax: Navigating tax authorities’ digital platforms for effective tax compliance’. Oyedele, who stressed the need to simplify the process of paying taxes through technology, said, “Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult. “So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer. It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost.” He said the technology would reduce the cost of compliance, adding “therefore, you can get more people into the tax net.” Oyedele said, “Everything we do today is impacted by technology and technology is making things better, faster and more cost-efficient and cost-effective. So, it is no longer acceptable for authorities to live in the past. “Even though Nigeria is starting late, they say, ‘Better late than never. So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns.” Noting that getting a tax clearance certificate was like rocket science in the past, he said, “With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems. It is not enough to criticise; we must find the solution together.” “With our experience dealing with other countries, we know things that work in other places; so it is very good that we have the Federal Inland Revenue Service, the Lagos State Internal Revenue Service and the Presidential Enabling Business Environment Council here today. It is the beginning of the process, and we hope that by this time next year, all these processes will be much better such that the experience of the taxpayer will be a lot better.”   Source: Punch

The Federal Inland Revenue Service (FIRS) on Tuesday apologised to the Tax Appeal Tribunal sitting in Abuja for the delay in serving processes on an appellant, Mr Joseph Daudu (SAN),  in the case of alleged N1.2 billion error in taxation. Daudu said he was dissatisfied with the FIRS assessments of his Withholding Tax (WHT), Personal Income Tax and Value Added Tax (VAT) for the period from 2010 to 2017. Specifically, he expressed dissatisfaction with the decision to assess him with respect to WHT and VAT in the sum of N 1. 2 billion. He, therefore, prayed the tribunal to restrain FIRS. At the resumed sitting, Mr Abedayo Adedeji, counsel for Dauda, told the Tribunal that FIRS served them a witness statement on oaths only this morning. He said that on the face of it, it necessitated a response from them, ( the appellant) according to him “we have not been properly served. ” In his response, Prof. Taiwo Osipitan SAN, counsel for FIRS apologised for the delay in serving the appellant as the respondent was trying to get all the processes served which did not work out as planned. He told the tribunal that they however have other processes to serve on the appellant but had served only one this morning and would serve the remaining before the next adjourned date. The tribunal, which was presided over by Mrs Alice Iriogbe, adjourned sitting until April 16, for parties to be served and reply before the next adjourned date. NAN reports that Daudu, claimed that it was a misnomer for the appellant, who operates a law firm as a legal practitioner and does not deal in primary goods, to be assessed on Withholding Tax (WHT). “It is unheard of for a legal practitioner to pay Withholding Tax, the respondent acted in error when it assessed the appellant on individual Income Tax from 2010 to 2017 in the sum of N977.  5 million,” he said. Responding, FIRS noted that its assessments were not in error and that it was discovered that the appellant did not deduct and remit WHT on some of the expenses and payment made under the period in review. FIRS, therefore, prayed the Tribunal to declare that the notices of assessments issued on the appellant for 2010- 2017 assessment was right. It also urged the tribunal for an order mandating the appellant to pay the total sum of N1.2 billion being the appellant’s liability for WHT, Personal income tax and VAT for 2010 to 2017 years of assessment. FIRS stated that it rightly assessed the appellant; acting in accordance with the law and by collaborating with the Economic and Financial Crimes (EFCC) on non-declaration of income as well as tax evasion. (NAN).   Source: Oraclenews

Nine months after the Federal Government approved the removal of Value Added Tax (VAT) from air transport, the decision is yet to be implemented. Capt. Nogie Meggison, the President of Airline Operators of Nigeria (AON), had lamented that its members paid at least N10 billion annually as 5 percent VAT to the coffers of the Federal Government through the Federal Inland Revenue Service (FIRS). According to AON, the remittance of VAT was negatively affecting its operations and it called on the government to emulate other countries in removing VAT from revenues collected from its members. Investigation by Daily Independent revealed that after the government’s announcement of the approval of VAT in June, last year, AON wrote series of letters to the government reminding it of the pronouncement and the need to commence implementation immediately. But nine months after, the government was yet to reply to any of the letters written to it by the leadership of AON. Air transport is the only form of transportation that remits VAT to the government, while rail, road, and marine don’t. Alhaji Muneer Bankole, the Chief Executive Officer (CEO), Med-View Airline Plc, in an interview with Daily Independent, confirmed that the government was yet to implement the VAT removal policy. He explained that the umbrella body of the airline had made attempts to ensure its implementation without success, stressing that the government still needed to inform the Ministry of Finance through memos which, he said, had not yet been done. He called on the government to hasten the implementation to further reduce the financial burden on the operating airlines in the country, saying that while the Nigerian government was collecting five percent VAT from the indigenous airlines, their foreign counterparts that operate in the country don’t remit such, either in the country or at their bases. He said: “As at today, the answer is negative. Nothing is being done in that direction. All we are praying for is still to have the relevant authorities to do the right thing. “The government will still need to talk to the Ministry of Finance, budget and everybody, including the National Assembly, to have it down and become a law.” Besides, a source close to one of the operating airlines told Daily Independent that FIRS still insists on the collection of VAT from the airlines despite the pronouncement of the government. According to the source, FIRS officials said the collection would continue until the airlines fast-tracked the gazetting of the pronouncement. The source, who is a management staff of the airline, also said that the carrier had written series of letters to the government on the issue to no avail. He said: “It’s true that the government publicly made the announcement on June 1, 2018, but nine months after, nothing is heard from the quarters of government. We still remit VAT to FIRS and, most times, it is internationally inflated. “This pronouncement is not different from the one made on removal of waivers on customs duties. “At times, officials of customs still frustrate the waivers, too, through their antics. It is a different thing when a government makes a pronouncement and another thing when that pronouncement is followed with action. We need to walk the talk in this country.” Prior to the Executive Order, AON had threatened that its members would no longer pay VAT with effect from June 14, 2018. The group had said then that the decision was taken after deliberations by the chief executive officers of airlines in the country. The body had argued that Nigerian domestic airline travel was the only mode of transportation paying VAT in the country, while road, rail, marine and international airlines don’t pay, alleging further that some of the domestic airlines were exempted from paying VAT and called for a level playing field for everyone. The body had added: “The AON’s position is that the VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international air travel carriers are not subjected to VAT. “Moreover, a situation whereby some airlines are paying VAT, while some other privileged airlines are not paying VAT, and the VAT, which we pay is being used to subsidise our competitors against those that are making payment is unfair.” Few weeks later, President Muhammadu Buhari, through an executive order, had announced removal of VAT from the levies paid by the airlines, which received commendations from all stakeholders and professionals in the sector.   Source: Independent

FEDERAL Inland Revenue Service (FIRS) on Monday arraigned Fortless Global Concept Limited and Everyday Wine Shop and their representatives at the Federal High Court, Abuja on alleged tax evasion, obstruction of official duty and attack on staff of the FIRS on duty among other charges. In the Charge No: FHC/ABJ/CR/48/2019, between the Federal Government of Nigeria (Complainant) and Fortless Global Concept Limited (also known as Fortless Supermarket and Stores and Chukwu Ejike (Defendants), the FIRS preferred a six-count charge bordering on tax evasion and assault on FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007. Similarly, in the Charge No: FHC/ABJ/CR/47/2019, between the Federal Government of Nigeria (Complainant) and Everyday Wine Shop (also known as Everyday Wine Shop &Bar), Mbah Sunday and Epkeha Peter (Defendants), FIRS preferred a six-count charge also bordering on tax evasion and assault on FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007. Representatives of the two companies who are currently on administrative bail: Mbah Sunday and Epkeha Peter for Everyday Wine Shop and Chukwu Ejike for Fortless Global Concept pleaded not guilty to the charges. Justice Taiwo O. Taiwo of the Federal High Court 10, Abuja granted the application of the leader of FIRS prosecution counsel, James Binang and scheduled March 21, 2019, for the FIRS to prove the charges against the defendants. The Court also granted that the counsels should bring the defendants to Court on 21 March 21, 2019, for further hearing. Some of the Charges against Everyday Wine Shop are: “That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being obliged to deduct and remit Value Added Tax (VAT) in the course of your business, conspired amongst yourselves to participate in Tax Evasion; and you thereby committed an offence punishable under Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007. “That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being taxable persons conspired amongst yourselves to obstruct and assault authorised officers of the Federal Inland Revenue Service (FIRS) in the course of the performance of their official functions; of pasting Value Added Tax (VAT) Non-Compliance Notice on business premises of persons and individuals adjudged by the Service to be Non Tax Compliant; and you thereby committed an offence contrary to Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007. “That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being taxable persons conspired amongst yourselves obstructed and assaulted Miss Funke A. Shodunke, an authorised officers of the Federal Inland Revenue Service (FIRS) in the course of the performance of their official functions; of pasting Value Added Tax (VAT) Non-Compliance Notice on business premises of persons and individuals adjudged by the Service to be Non Tax Compliant; and you thereby committed an offence contrary to Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007,” the Charges read.   Source: Tribuneonlineng

The Anambra state Internal Revenue Service (AIRS) says it would on April 1st, 2019, embark on annual audit of companies, businesses and institutions operating in the state in oder to confirm their level of adherence to deduction and remitting of income taxes. The executive chairman of AIRS, Dr. David Nzekwu, who disclosed this in a press conference in Awka on Friday, explained that the exercise was backed by relevant tax laws. Nzekwu said it was expected that every company operating in the state should at the beginning of every year file in their annual returns before 31st January, with details of employees working with them from whom they make Pay As You Earn (PAYE) deductions.  He said: “In addition, the companies are also expected to file in their own returns as a company to the board of internal revenue before 31st March. It is established that any company that fails to file in their tax returns within this period will pay penalty of N500,000. While the penalty for individual is N50,000. It is well spelt out in section 81 and section 41 under the relevant subsections of personal income tax 2011 as amended. He however, commended businesses and companies operating in the state for their compliance to tax payment, adding that it was responsibilities of every citizen and corporate entities to adequately and promptly pay their taxes. On tax evaders, the AiRS chairman, he said the agency would continue to follow due processes, which include obtaining court judgement and executing them accordingly, like it did some months back when it sealed off all branches of United Banks of Africa (UBA) in the state.   Source: Blueprint

The Federal Government of Nigeria (“FGN”), in furtherance of its commitment to infrastructure development being a key growth driver and economic development enabler; issued the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019 otherwise referred to as the Presidential Executive Order No. 007 of 2019 (“EO7” or the “Order”). Made pursuant to the executive powers of the Federation, as vested in the President by the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and section 23(2) of the Companies Income Tax Act (“CITA” – Cap C21, Laws of the Federation of Nigeria, 2004), the Order established the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (“the Scheme”) as a Public-Private-Partnership (“PPP”) intervention in the delivery of good roads across the length and breadth of the country. Pursuant to the EO7, private companies will be able to finance construction or refurbishment of federal roads designated as “Eligible Roads” under the Scheme and recoup their investments by utilizing the approved total costs expended on the particular Eligible Roads, as a credit against the annual Companies Income Tax payable by such private companies in the corresponding year of assessment. The value of the credit due to a private sector partner, known as the Road Infrastructure Tax Credit (“Tax Credit”), as calculated in accordance with the terms of the Scheme, will be reflected on the Road Infrastructure Tax Credit Certificate (“Tax Credit Certificate”) to be issued by the Federal Inland Revenue Service (“FIRS”), in line with the conditions stipulated in the Order. In specific terms, the Scheme, which has a duration of ten (10) years from the date of commencement of the EO7, is set up to: enable the FGN leverage on private sector funding for the construction or refurbishment of Eligible Road infrastructure projects in Nigeria; focus on the development of Eligible Road infrastructure projects in an efficient and effective manner that creates value for money through private sector discipline; and guarantee Participants in the Scheme timely and full recovery of funds provided for the construction or refurbishment of Eligible Road infrastructure projects in the manner prescribed in the EO7. This article provides a synopsis of the Regulations for the Administration and Operation of the Scheme; Eligible Roads; Participants; and application of the Tax Credit granted under the Scheme. ELIGIBLE ROAD The EO7 defines an Eligible Road as any road approved by the President as eligible for the Scheme on the recommendation of the Minister of Finance and as duly notified to Participants and published pursuant to the Order. Such recommendation, however, is expected to be made from a list of roads presented to the Minister of Finance by the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Management Committee (“the Committee”), being the implementing and administrative body to be established pursuant to the EO7. As provided in the EO7, the list of Eligible Roads may be updated from time to time by the President on the advice of the Minister of Finance provided that such updates are published in the Official Gazette of the Federal Republic of Nigeria (“FRN”). ADMINISTRATION AND OPERATION OF THE SCHEME The Scheme is to be implemented and administered by the Committee established by the EO7. As provided in the Order, the Committee is expected to: be chaired by the Honourable Minister in charge of Finance while the Honourable Minister in charge of Works is to be the Deputy Chairman. The Permanent Secretary, Federal Ministry of Finance is to act as the Secretary; draw its members from specified Ministries, Departments and Agencies (“MDAs”) of Government (not below the rank of a Director or its equivalent). The relevant MDAs include the Federal Ministry of Finance; Federal Ministry of Power, Works and Housing; Federal Ministry of Industry, Trade and Investment; Federal Ministry of Justice; Bureau of Public Procurement; FIRS; Nigerian Investment Promotion Commission; Securities and Exchange Commission (“SEC”); Infrastructure Concession Regulatory Commission; Budget Office of the Federation; National Bureau of Statistics; Nigerian Investment Sovereign Authority; and The Presidency; facilitate publication, in the prescribed manner, of the following documents: (i) a list of Eligible Roads as published in the Official Gazette of the FRN; (ii) design and specification of Eligible Roads; (iii) a list of required documentation by an applicant desiring to be registered as a Participant in the Scheme; (iv) Project Cost and Completion Timeline bid; review and evaluate applications submitted by any company, or a pool of companies operating through a Fund Manager; register Participants in the Scheme pursuant to the execution of appropriate Memorandum of Understanding (“MOU”) executed between Participants and the Committee; register and designate as an Infrastructure Fund, any special purpose vehicle (“SPV”) set up by a Fund Manager in accordance with the provisions of the Order, in conjunction with the SEC and in compliance with applicable SEC rules and procedures, as appropriate; ensure that the contracts for road construction and refurbishment included in the Project Cost bid submitted by Participants are obtained through a competitive bidding process, and thereafter facilitate the review, evaluation and approval of the submitted Project Cost and Completion Timeline bid; applying the standard procedures adopted by the Federal Ministry in charge of Works;     facilitate evaluation by the Federal Ministry in charge of Works, the degree of completion of an Eligible Road infrastructure development project and thereupon issue a certificate of work done on an annual basis;     facilitate the issuance, on an annual basis, of a Tax Credit Certificate by the FIRS to a Participant or Beneficiary under the Scheme; within fourteen (14) days of the issuance by the Committee of the certificate of work done;     do other things, specifically provided in the First Schedule to the Order, necessary for the effective administration and operation of the Scheme. PARTICIPANTS Participation in the Scheme is open to the following set of entities:  any company or corporation (other than a corporation sole) established under the Companies and Allied Matters Act or any law in force in Nigeria, and designated as

Lagos State generated N50.4 billion or 60.8 per cent of total N83.2 billion generated from Value-Added tax (VAT) into Federation Account in January 2019. According to documents related to the Federation Account Allocation Committee (FAAC), Federal Capital Territory (FCT) came a distant second with N18.9 billion. Oyo State was third on the list with a VAT collection of N3.0 billion for the month. Rivers and Kano were the only remaining states that crossed the billion naira make with N1.9 billion and N1.2 billion respectively. The document, however, revealed that the Nigeria Customs Service (NCS) also contributed N21.2 billion to the VAT pool during the month under review. Cumulatively, N205.2 billion has been generated into VAT account between January and February this year. This is N52.1 billion short of the projected N257.3 billion for the two month period. Meanwhile, Federal Inland Revenue Service (FIRS) repoted to the FAAC meeting which held on February 27 that it recovered N47.5 billion from waivers on taxes and penalties granted to some companies. A representative of FIRS told the meeting that a balance of N23,703.760,661.00 was still outstanding as at January 23, 2019.   Source: Tribune

As FIRS law demands, all limited liability businesses in Nigeria are to register for company tax TIN (Tax identification number) and VAT (Value Added Tax). To enforce taxation by FIRS, all limited liability businesses bank accounts and money therein, will not be allowed access by their owners after 15th March, 2019 until they register and pay current and arrears of tax based on bank cash transactions over the years, which is huge and devastating for businesses. In view of these, there are three options for businesses that have limited liability bank accounts: ( i) Register with FIRS for company taxes and VAT, and be prepared to pay arrears of tax calculated by FIRS based on your bank cash transactions over the years. ( ii) On or before 15th March, 2019, to withdraw cash, and pay same into either personal account or enterprise account that is not limited liability businesses; and not by transfer since a transfer will still be traced by FIRS via BVN and be taxed. (iii) Or engage a tax consultant for your company to be audited for the number of year it operated , how much tax ought to be paid, the tax due to be paid and tax clearance be collected. Please let our people operating numerous registered limited liability bank accounts be informed to take a step to avoid frustration and embarrassment   Source: Businesstrumpet