Tax preparation services

The Federal Inland Revenue Service (FIRS) on Saturday urged Small and Medium Enterprises (SMEs) to pay taxes to attract investors. FIRS Deputy Director, Mrs Angel Fadahunsi, made the appeal at the Techpoint Build expo held in Lagos. The News Agency of Nigeria (NAN) reports that Techpoint Build is a conference and exhibition that connects startups and SME community with industries, bringing together people from across Nigeria and neighbouring countries. According to her, taxes are collected from business owners to sustain the nation and to provide amenities that will enhance both lives and businesses. “SMEs need to pay taxes, firstly because it is the law, needed for the development of the nation, provision of social amenities like road, hospital, taxes are needed to sustain these things. “Lots of SMEs are looking for investors that will invest in their business but an investor will only invest in businesses that pays tax to avoid being shut down,” she said. Fadahunsi also adviced the SMEs that in planning for their business, they needed to factor paying of bills like taxes into it.    She said that complaining that taxes paid were too much was not the case as tax payment whether with the federal, state or local government was essential to avoid business closure. She listed some basic steps that would guide the SMEs as to first register the business immediately to get the Tax Identification Number (TIN) which she added was free. She urged them to keep proper records of their business expenses as much as possible , so that when they start making profit, they would be able to make the right tax payment. She pointed out that the Value Added Tax goes with goods and services and grace period was not attached to it, adding that once profit was made, tax was required. “Tax is laid on profit between 20 to 30 per cent and that is why proper business records is required. “If the business did not make any profit in a year, it behoves the owner to file the returns so that the FIRS will know,” she said. Also Mrs Kemi Balogun, Team Lead, Tech and Service Partnership, AXA Mansard Insurance PLC., said that insuring businesses was to protect it from unforseen events. According to her, an SME is not expected to have so much money to put, so when one sets up their business, the first insurance policy to do has to do with the persons and employees health. “Insurance is affordable for an SME and is key to making the business stand against all odds. “Having good health is paramount and you cannot run your business well if you are sick, so the need to insure against accident and others. “The next is insuring the equipment and structure, the assets that so much money was put in to start the business against theft, flood, fire and others,” she said.   Source: Guardian

The Executive Chairman, Federal Inland Revenue Service, Mr Babatunde Fowler, has said that the service will this year surpass the N5.3tn revenue generated in the 2018 period. He said this during a chat with finance journalists on Thursday in Abuja. Fowler said that the service had embarked on a series of reforms aimed at making it easier for taxpayers to pay their taxes. He said the reforms had started yielding results as the service was able to generate its highest ever tax revenue of N5.3tn in 2018. The FIRS boss explained that while huge revenue could be generated from oil, such revenue was unsustainable due to the volatile nature of the crude oil prices. Fowler said the government recognised the importance of non-oil revenue to economic development, adding that this was why the service was being positioned to generate adequate revenue for the distribution by the three tiers of government. He said, “We recorded some improvements last year as well made the sum of N5.3tn which is the highest in the history of the service. “But it’s not about that but on what it can do. Many people believed that if we are generating so much money, then the Federal Government budget has no problem being funded. “But they tend to forget that what we generated is shared between the three tiers of government. “We generated N5.3tn and the highest before then for the country was N5.07tn.  But the difference here is that in 2012, the oil revenue tax accounted for 64 per cent while in 2018 oil revenue accounted for 46 per cent.” He said as a result of the dwindling oil revenue, the FIRS was working hard in ensuring taxes were collected and remitted for the benefits of the nation and all the three tiers of the government by targeting non-oil revenue. In carrying out its mandate within the dynamic economic environment, the FIRS boss said the service had adopted initiatives to ensure a robust tax administration that was beneficial for all stakeholders. Source: Punch 

The Alliance for New Nigeria (ANN) has condemned the plan by the Federal Government to increase Value Added Tax (VAT) from the current 5 to 7.5 percent, adding that the proposed increase smacked insensitivity on the part of government to the suffering of Nigerians.      Lanre Oyegbola, Director General, ANN 2019 Presidential Campaign, in a press statement, said, “An additional 2.5 percent of VAT would automatically increase the shelf price of most items from the moment it is implemented and this would create a ripple effect across both the formal and informal sectors of the economy.” The campaign director general noted that the All Progressives Alliance (APC) government is one that gives with one hand and takes it away with the other given the timing of the increase in the VAT.            He said one could not explain the fact that while the President Muhammad Buhari-led government was yet to agree to the minimum wage deal with labour, the same government was at the same time increasing the VAT, adding that it was a show of deception and insensitivity to the plight of Nigerians. Oyegbola called on Nigerians to reject every form of deceit the government might bring to the table. He also called on the people of Nigeria to vote against the APC and the Peoples Democratic Party (PDP) in the February 16 2019 presidential election. Source: Independent 

a. Introduction The Federal Inland Revenue Service (FIRS) has published the Income Tax (Country-by-Country Reporting) Regulations, 2018 (CbCR Regulations). The CbCR Regulations was made public on 19 June 2018 and have an effective date of 1 January 2018. The Country-by-Country reporting is a response to evidence-based research on the direct consequence of harmful tax practices that result in profits being moved away from where they were made to the ultimate benefit of the taxpayer. b. Implications of CbCR The CbCR is one of the three-tiered transfer pricing documentation approach recommended by the Organisation for Economic Cooperation and Development (OECD) in the Action 13 report of the Base Erosion and Profit Shifting (BEPS) project unveiled in October; 2015. The CbCR contain information on the location of revenue, profits, taxes, employees and economic activity within large MNE Groups, based on a standard template. The objective of the CbCR is to allow tax administrations to perform high-level transfer pricing risk assessments and to evaluate other BEPS related risks. In Nigeria, the ultimate parent entity (UPE) of an MNE Group that is resident for tax purposes in Nigeria  would be obliged to file the CbCR, where the consolidated revenue of the Group is N160 billion or above.  As provided in the Regulations, the CbCR must be filed within 12 months following the MNE Group’s accounting year end.  An MNE Group member (Constituent Entity) whose UPE is not tax resident in Nigeria, is required to notify the FIRS of the identity and tax jurisdiction of the entity responsible for filing the CbCR. This notification must be made no later than the last day of the reporting accounting year of the MNE Group. c. Notification and Consequence for Non-Compliance To show commitment to driving compliance with the Regulation, the FIRS has subsequently released guidelines for completing the CbCR template and more recently, a Public Notice reminding MNE Groups operating in Nigeria of their obligation to make the above notification to the FIRS. The public Notice serves as a wake-up call for MNE Groups to comply and avoid stiff administrative penalty imposed by the Regulations for non-compliance. Penalty for late filing of CbCR has been determined at N10,000,000 for the first month of default and N1,000,000 for every month the default continues while penalty for incorrect/false report is N10,000,000. Penalty for failure to notify FIRS of the MNE Group’s UPE, Surrogate Parent Entity or identity & residence of the Group’s reporting entity has been determined at N5,000,000 for the first month of default and N10,000 for every day the default continues.

The Federal Inland Revenue Service, FIRS, made a whooping N300.4 billion in three years, between 2016 and 2018 as the cost of collecting taxes. According to the law setting up the revenue collection agency, FIRS is allowed to deduct four percent as cost of revenue collection from non oil taxes before remitting the remaining to the Federation Account. According to data from the FIRS, a breakdown of the N300.4 billion cost of revenue collection by the FIRS showed that N85.99 billionwas received in 2016, which is about 2.6 per cent of the total actual taxes of N3.30 billion collected in 2016. In 2017, the FIRS received N100.3 billion as the cost of revenue collection out of the N4.02 trillion it generated, while in 2018 fiscal year, the service got N114.1 billion as the cost of revenue collection out of the N5.32 trillion revenue it generated for that year. Source: Vanguard  www.innerkonsult.com      

THE Oluwo of Iwo, Abdulrasheed Akanbi over the weekend underscored the need for people of Osun to pay tax in order for the government to bring about effective development in the state. He made the appeal in Iwo township during the “Thank You” tour of the state governor, Mr Gboyega Oyetola to the people of the community. According to Oba Akanbi, “there is no other way than to pay tax. We cannot continue to rely on funds from the Federation Account if we want to develop this state. What if there is no oil money?” Source: Vanguard 

The federal in land revenue Service (FIRS) is to leverage digital platform sin widening the tax net to meet the N8trillion revenue projection of the government for 2019. In growing the nation’s revenue through taxation to surpass the N5.3tn generated in 2018, the highest revenue generation for the FIRS, there is a need to strengthen legislation on Nigeria’s digital economy. Nigeria digital economy is estimated to worth $88bn by 2021 with a capacity to create about three million jobs. The FIRS in leveraging technology in tax collection, especially Value Added Tax (VAT), is to adopt the DSTV model. Babatunde Fowler, the executive secretary of FIRS said DSTV is one of the first cooperate organisations in Nigeria to implement ‘VAT auto collect’, which has significantly increase on tax collection. “… as you pay your subscription to DSTV, the portion that is VAT is remitted straight to government and that is basically what we are calling on all corporate organisations to do including our state government,” said Fowler. Fowler stated this at the 2019 FIRS stakeholders retreat themed, “Parliamentary Support for Effective Taxation of the Digital Economy” held in Lagos recently. According to Fowler, the FIRS have deployed technology in to tax administration and collection to bridge the burden on tax payers. You can pay your taxes through your phone, on your banking application at no cost. So, in terms of the cost and even all cost of collection has gradually started going down. Basically we have to realise that those who pay taxes are those who make profit and those who earn income,” Fowler stated. Speaking on the revenue generated in 2018 being the highest made by the service, Fowler said “It means it can be done – for the last three years the non oil revenue have exceeded the oil revenue; while the increase in tax payers has doubled within three years and Nigerians now realized the only way to get sustainable economy and get revenue is through taxation”. Data from the FIRS also indicates a rise in taxes collected in comparison of non oil to oil revenue for 2016 – 2018. For non oil revenue, the services collected 64.99; 62.25; and 53.62 percent in 2016, 2017, and 2018 respectively, while oil revenue for the period under review was 35.01; 37.75; and 46.38 percent. Babangida Ibrahim, the chairman House committee on finance said the National Assembly is ready to fast track legislative intervention for a digital economy. “I can assure you that anything that will bring improvement on revenue generation of government will be supported: anything that will assist government in deciding and implementing policy; we will support it,” said Ibrahim. On the implication multiple taxation and burden of widening the tax net to bring in more revenue for government, Ibrahim said “There are many mechanism of widening the tax base; it is only when you widen the tax base that will enable you to collect more tax. Widening the tax base does not mean taxpayers are liable to pay tax – that is what most people do not understand. Source: Punch