Tax preparation services

Nigeria’s chances to boost revenue will mainly come from four places: company income taxes (CIT), value added taxes (VAT), independent revenues and customs revenues. But first, just like Nigerians, the FG also needs to pay attention to the small details. Recently, the federal government read a riot act to its independent agencies, which it believes had delivered too little. The FG’s independent revenues from over 400 agencies stood at N295 trillion in 2017. Hence, it is a positive step that the federal government is asking the agencies to submit their budgets through the Budget Office of the Federation and that it would also start reviewing the government’s expenditure patterns on a quarterly basis. However, the biggest help to fix these agencies will come from revamped corporate governance. Most of these agencies are bloated with high levels of inefficiencies, in terms of personnel and overheads. This will require a surgical approach, fiscal discipline, with immense political backing. Maybe then, these agencies can easily provide N600 billion to the federal government. There is also the path through increased VAT. Nigeria has one of the lowest VATs in the world. A flat VAT of 5 per cent does not work and in the non-oil revenue matrix, VAT has seen the highest growth in recent times. It is time that the FG faces the issue and doubles the VAT to 10 per cent, while putting consideration on this for fuel and agriculture-related expenditures. There is a huge political economy to this but Nigeria has to accept that current fiscal practices can help its cause. If the FG increases VAT to 10 per cent, this has the potential of bringing an additional N800 billion into the federation’s coffers. In my view, the 5 per cent VAT should be solely distributed to the federal government. State governments are in more devastating conditions but the challenge is not about giving them more taxes from the current base. It is about encouraging them to be competitive and create incentives for private investments in their states for increased personal income tax (PIT). On the company income tax, I am of the opinion that to spur new capital growth, the current 30 per cent should be reduced to 20 per cent. Nigeria deserves to gain more by doubling its VAT and allowing companies to thrive with tax cuts, and creating more incentives for private investments. There is also the need to ask questions on the warped approach to distributing taxes. Currently, CIT distribution is governed by rules that favour states with large populations. Despite a large financial district in Lagos and increasing investments in the Ogun State corridor, they do not benefit more than other states for such efforts. For example, the company income taxes that Nigerian Breweries pays have no direct linkage to it plants in Lagos or Ibadan, while Kano State (despite its recurrent destruction of beer bottles) benefits more from the distribution of this tax due to its population. How will states benefit from the ease of doing business index without incentivising the corporate income tax? It is appropriate that the FG provides an incentive for states with newly established companies who pay the CIT, as it done with the distribution of VAT. Nigeria can’t run away from the concession of certain institutions to free up government expenditure and end cycles of waste. However, the sustainable way to deepen public sector revenues is to seek the expansion of Nigeria’s private sector, which is too hollow for the size of our GDP. It takes growth in jobs and taxable income to provide opportunity for government… Finding resources for the FG is not easy in a country without a single database of its citizens, weak tax compliance and high level of informal trade. However, with the rise in personnel costs and debt servicing, to reach N5 trillion in the near term, it is only important to ask deep questions. Where are the holes leaking funds that can be plugged? What about maximising funding from existing sources? It will also take long-term approaches backed by an informed leadership. Any sale of asset in joint venture (JV) operations or stolen funds recovered in 2019, should not be considered as a revenue line due to its non-repeatable annual nature. It is a mere short fix to plug the yawning deficit gap. The federal government needs to consider that the revenue angle requires restructuring. There is also need for the consideration of the removal of fuel subsidy. Whatever the FG might be selling to the public, the Nigerian National Petroleum Corporation (NNPC) reports show that as at July 2018, it has charged N427 billion from domestic crude payments in the name of under-recovery or subsidy. Nigeria can’t run away from the concession of certain institutions to free up government expenditure and end cycles of waste. However, the sustainable way to deepen public sector revenues is to seek the expansion of Nigeria’s private sector, which is too hollow for the size of our GDP. It takes growth in jobs and taxable income to provide opportunity for government to receive taxes. Nigeria needs to boldly face its issues, and the post-election era in 2019 is another window for doing the right thing. We cannot keep expanding expenditure without a review of the other side of the equation – revenue. The federal government might not be able to apply a combination of the removal of subsidy, an increase in VAT, reduction of company income tax or driving efficiencies into its revenue agencies at the same time, due to inflationary concerns or the political economy of these decisions. The federal government needs at least N2 trillion in new revenues to be able to meet its recurrent obligations (not capital) without blowing up the deficit. Whatever path the FG chooses in shoring up its revenue, it won’t be painless but would be a courageous way of fixing an emerging dangerous imbalance. Source: Premium Time

In 2017, when the Federal Government signed the Executive Order to commence the Voluntary Assets and Income Declaration Scheme, many people doubted the political will of the administration of President Muhammadu Buhari to fully implement the tax amnesty programme. The tax amnesty programme, which started on July 1, 2017, came to an end on June 30 last year and it offered a 12 -month window of opportunity for taxpayers to regularise their tax liabilities. In exchange for full and honest declaration, the government waived penalties that should have been levied and also waived the interest that should have been paid on overdue tax. Also, those who declared their tax obligation honestly would not be subjected to any investigation or  tax audit. During the period of the implementation of the tax amnesty programmes, the Federal Inland Revenue Services under the leadership of the Executive Chairman, Mr Babatunde Fowler, also implemented reforms aimed at improving the level of voluntary compliance. Before the commencement of the current administration, Nigeria’s tax system was unable to effectively achieve its objective of ensuring voluntary compliance due to lack of robust framework for the taxation of informal sector and high networth individuals, thus limiting the revenue base and creating inequality. In a bid to address these challenges, the FIRS came up with various technology -driven initiatives aimed at increasing the number of taxpayers, and reducing taxpayers’ burden by making tax payment more convenient. Some of these initiatives were the deployment of electronic payment channels for registration, filing, payment, receipt  and tax clearance certificate to facilitate easy remittance of taxes by taxpayers. The service also came up with information exchange for third party databases which was implemented in collaboration with government agencies such as the Nigeria Customs Service, and the Corporate Affairs Commission, among others. Since the implementation of these reform, investigations by our correspondent showed that the number of registered taxpayers had increased from 10 million in 2015 to about 19 million in 2018. Figures obtained from the FIRS showed that within a three-year period covering January 2016 and December 2018, the country earned a total of N12.65tn in tax revenue. An analysis of the tax revenue figures obtained by our correspondent from the FIRS showed that the amount was generated from two major sources of taxes which were oil tax and non-oil tax. The oil tax is made up of Petroleum Profit Tax while the non-oil taxes are Company Income Tax, Gas Income, Capital Gains Tax, Stamp Duty, Value Added Tax, Education Tax, Tax Amnesty and Nigerian Information Technology Development Fund. Under PPT, analysis of the tax revenue figures from the FIRS revealed that the sum of N5.14tn was generated between 2015 and 2018, while the balance of N7.51tn was earned from non-oil tax collection during the three- year period. A breakdown of the N12.65tn revenue collection figure showed that the sum of N3.3tn was generated in 2016. In 2017, the amount rose to N4.02tn before the service recorded its highest revenue collection figure  of N5.32tn in its entire history in 2018. Further breakdown of the PPT of N5.14tn revealed that N1.15tn was collected in 2016, while the tax figure rose in the 2017 and 2018 fiscal years to N1.52tn and N2.47tn respectively. Source: Punch 

Every country collects different taxes from its residents and local companies. What are the types of taxes in Nigeria in 2019? Let us describe them all. This will be useful information for everyone who thinks about launching a new business in our country or investing their money into a local project. Types of taxes collected by state government in Nigeria. Nigeria is a modern country with a huge population that accounts for more than 190 million people. All these people are expected to pay taxes if they work, run a company, do freelance projects or earn money in any different way. It is important to know all the different types of taxes in Nigeria because you must pay them correctly and according to your occupation. Non-paying can result in expensive fines that can cut down your profits and make you earn way less than you possibly could. Various types of taxes in Nigeria are collected by Federal Inland Revenue Service shortly abbreviated as FIRS. Types of taxes in Nigeria in 2019? Official website of FIRS lists many types of taxes collected in Nigeria. As of today, there are 9 of them: CIT, WHT, VAT, PPT, PIT, SD, CGT, NITDL, EDT Finances have to be counted, taxes must be paid. You already know what are the types of taxes in Nigeria. Now, let us shortly describe each of them. CIT (Companies Income Tax) This is one of the main types of taxes collected by state government in Nigeria. CIT stands for Companies Income Tax. Each firm or company that is established in our country has to pay tax on its profit. How much is CIT value? Businesses have to pay 30 percent of their overall profit. The time when this tax is paid depends on whether the firm is new or already exists. By the way, if a firm is at least 4-year-old, it could pay the minimum tax. Everything depends on its profit. Such an exemption is possible if the company has made a loss or its payable amount is lower than 30 percent. WHT (Withholding Tax) These three capital letters stand for Withholding Tax. It is also used on the profit and depends on each transaction. Businesses pay it in advance on their income, right after the transaction was made. How much is WHT? Unlike CIT that can get up to 30 percent, WHT tax is way lower. It can range from 5 to 10 percent, and it must be filed for on the twenty-first day of a profitable month. It is necessary to pay Withholding Tax on time. If these types of taxes in Nigeria are paid later than supposed, you would have to pay the penalty, an expensive one. Each new month would add 5,000 Naira to the original penalty of 25,000 Naira per the first month. VAT (Value Added Tax) This is another type of taxes collected in Nigeria in 2019. VAT stands for Value Added Tax. It is usually paid by consumers and it consists of several stages. Customers who go to the store to buy products, goods, food, toys, equipment, service are charged about 5 percent of the cost unless the product is exempted by the Tax Act. The final customers pay this tax however they do not file it every month. This is the task of the company or firm that sells service or goods with VAT. PPT (Petroleum Profits Tax) This abbreviation stands for Petroleum Profits Tax. This is one of the various types of taxes in Nigeria that are only paid by firms involved in different operations in the petroleum sector of the economy. The income of such companies can be only liable to PPT and not CIT (on the same profit). The tax can get as high as over 65 percent per the company’s profit for some firms, or it can get even higher up to 85 percent for some petroleum firms. Sometimes PPT tax can be as low as 50 percent if the firm operates under the production sharing contract. Those companies that fail to file their taxes on time are usually charged 10,000 Naira penalty which can grow by 2,000 Naira by each additional day of failure. PIT (Personal Income Tax) What is PIT? This is a Personal Income Tax, another popular type of taxes collected in Nigeria. Each individual who earns any type of profit has to pay taxes, and the amount paid can vary from 7 to 24 percent. If you are a Nigerian, you must pay 20 percent of your gross income plus either 1 percent on top of it the annual income is under 300,000 Naira. Non-payment would result in an unpleasant penalty which can vary from 5,000 to 500,000 Naira depending on whether you are a business owner or employer. SD (Stamp Duties) Did you know that there is a special tax on written documents in Nigeria? It is called SD or Stamp Duties. If a company executes documents between itself and other people (groups, individuals), it is obliged to pay SD taxes. Some individuals who execute documents between themselves are also responsible for paying Stamp Duties on time. These documents can include guarantor forms, bills of exchange, deed of assignment and others. CGT (Capital Gains Tax) If you own any form of property in Nigeria or outside the country, you are obliged to pay CGT or Capital Gains Tax. How much is this tax? You have to pay a flat rate of 10 percent of all chargeable assets. NITDL (National Information Technology Development Levy) Among all the various types of taxes in Nigeria, NITDL is also present. This abbreviation stands for the National Information Technology Development Levy. Only some firms pay this particular tax, and only if their minimum turnover gets over 100 million Naira. The list of such companies usually includes financial organizations, banks, GSM and internet service providers, insurance corporations, etc. How much is NITDL? Its flat rate is 1 percent, and it is paid on the company’s profit

The Federal Capital Territory Administration (FCTA) said that it has so far identified and captured, in its database, over one million taxpayers in the Federal Capital Territory (FCT), who have received their Taxpayer Identification Numbers (TIN), through personalised SMS. The executive chairman, FCT Internal Revenue Service (FCT-IRS), Abdullahi Attah, who disclosed this to newsmen in his office, added that taxpayers’ registration and issuance of Tax Identification Number (TIN) is a continuous process in the territory. Attah, therefore advised FCT residents who are yet to get their TIN to visit any of the 10 FCT-IRS offices and obtain same through a process that lasts for not more than 10 minutes. He revealed that the service has developed partnership with all the commercial banks and key payment platforms to enable taxpayers pay their tax wherever they are in the world. The executive chairman also reminded employers of labour that they have a duty under the law, to deduct correct amount of PAYE from their staff and remit to FCT-IRS immediately after every deduction, adding that non-deduction of PAYE and late remittance attract penalties. He continued: “One of our main objectives is to ensure that all taxpayers in the FCT file their annual tax returns in the manner and within the time specified by law. Filing of annual tax returns is mandatory on each and every taxable person, whether under formal employment or in the informal sector.” Source: Leadership Newspaper

Mr Victor Olomo, the Managing Director, Process Concepts and Technologies (PROCONTEC) Ltd, has urged Federal Government to consider granting low interest loans and tax holidays to manufacturers and exhibitors at the ongoing Science and Technology Expo taking place in Enugu. He made the call in a telephone interview with News Agency of Nigeria (NAN) on Wednesday. Organised yearly by Federal Ministry of Science and Technology to encourage interaction among researchers, inventors, innovators and investors, the Science and Technology Expo was to largely commercialise research results from the country’s tertiary institutions. The theme for the 2019 expo is “Science, Technology and Innovation for Economic Recovery and Sustainable Growth.” Olomo, who said that the expo was an opportunity for indigenous manufacturers to showcase their products to the world, added that the event was also an avenue to link up government agencies especially in the area of research and development. He said that the expo brought together people involved in technology from all sectors to showcase different resources available in the country, as well as products they were able to add value to. According to him, the principal source of the country’s foreign exchange is oil but it cannot sustain the economy as many countries that buy the oil are going into non-fuel vehicles, hence the need to have alternatives. “So, where do we go from there if we don’t develop our resources. Many developed countries also organise such expo at national and international level to showcase what they have so as to attract patronage and collaboration,” he said. He, therefore, urged the exhibitors to take advantage of the exposure to reach out to investors that could commercialize their products. Source: BusinessDaily

The board of Meyer Plc has reacted to a media report last week that its head office located in the Ikeja area of Lagos State was sealed by officials of the Federal Inland Revenue Service (FIRS) also last week. In a statement, Meyer confirmed that truly, officials of the tax agency were at its office with a warrant to seal the property, but emphasised that after showing evidence of tax payment to them, the company was “re-opened.”  It was alleged that Meyer owed the sum of N54,658,701.00 in respect of the 2016 Year of Assessment. “On behalf of the Board of Directors and entire staff of Meyer Plc., we hereby issue this statement in accordance with the rules and directives of the Nigerian Stock Exchange to our esteemed shareholders, in relation to the publication recently made in the Nation Newspaper on 10th January 2019, with respect to the shut-down exercise conducted by the Federal Inland Revenue Service (FIRS) at the Company’s Head Office. “On 11 th Jan. 2019, our attention was drawn to a publication on page 45 of The Nation Newspaper dated 10th January 2019, and captioned, “Tax Debt – FIRS Shut down DN Meyer, Morison, Others.” We wish to clarify as follows: “The Federal Inland Revenue Service (FIRS) enforcement officers came to our office on Monday, 7th January 2019 with a warrant of distraint dated 7th Jan 2018. It was stated in paragraph 2 of the said warrant that DN Meyer Plc (now known as Meyer Plc) had arrears of Company Income Tax amounting to the sum of N54,658,701.00 in respect of the 2016 Year of Assessment. “We subsequently furnished the relevant documents showing tax returns and payments for the year of assessment in question to FIRS and these were deemed sufficient for the enforcement team to re-open our office on the same day. “We appreciate our investors and the Exchange for the concerns expressed and reassure you that the Management will continue to engage and co-operate with the FIRS,” the statement issued today said. Source: Business Post

OSOGBO—GOVERNOR Gboyega Oyetola of Osun State has described payment of taxes as necessary support to support the development of the state. Oyetola Speaking during Iresi Day, in Iresi, Boluwaduro local government area, Oyetola said that  prompt and sincere payment of taxes by various categories of residents is an important civic duty, immediate implication of which is more available funds for government to undertake critical projects, including roads. His words: “I congratulate our people in this town on another historic occasion. It is an annual programme, but this will be my first time here. Let me quickly say that your request for roads is normal. Our people across the state have been requesting same. A way to support government in actualising this is to pay your taxes promptly. We will do your roads, but pay your taxes”   Urging the youth to shun violence, cultism and thuggery, as these would compromise peace in the communities, the governor, in a release by his Chief Press Secretary, Niyi Adesina, explained that the event was evidence of promotion of Yoruba culture and values, which he said would be aided when history is returned to schools as teaching subject. He said: “I want to warn the youth not to accept thuggery contracts from politicians. Parents should encourage their children to learn a skill. Today, if you want good and dependable artisans, like bricklayer, carpenter or tiller, you go to Cotonou. This trend must stop.” He equally encouraged parents to allow their children and wards to acquire vocational skills, noting that the better way to cope in life is to have a vocation to fall back on, as it is increasingly impossible for government to provide jobs for every able and qualified graduate. Lagos 2019 budget already in the House- Budget commissioner Monarchs in attendance included Oba Sikiru Adedoyin Ibiloye (Iresi), and Oba AbdulRasheed Ayuotunde Olabomi, Odundun IV (Iragbiji), alongside APC national and state assembly candidates in coming February elections. Source: Vanguard

The Director General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, has called on the Federal Government to grant the education and the health sector tax holiday, to help mitigate the imminent social crisis bewildering the sectors. Vanguard Economic Discourse Muda made this known during a panel section at the Vanguard Economic Discourse on Human development index Vs economic growth in Lagos According to him, “The public and primary schools have practically collapsed. The public health institutions are practically collapse. ADVERTISING “We find a situation today where you have more private schools in many of the states they are public schools. We are faced with a situation today where we have more private hospitals than the public hospitals, that goes to show the role that private hospitals are playing even in the social sector space. “It also underscores the fact that the resources of the states are dwindling by the day and making it difficult for the government to discharge some of its fundamental obligations in the social space namely, issue of educations, health and even security. “The Federal Government should not be taxing a private school, either primary, secondary or university the way you are taxing a bank or an oil company, because they are helping to support the government to deliver on some key social objective. “We should grant them complete tax holiday and all the input into the educational sector, either education material, laboratory materials all this should come into the country free of import duty. So that the private sector may be able to complement the effort of the government in delivering quality human capital because we need human capital to drive the economy. Source: Vanguard

President Muhammadu Buhari on Friday in Abuja pledged that the Federal Government would look into the issue of illegal tax collections to encourage more private sector businesses to thrive in the country. The president made the pledge when he received the leadership of the Amalgamated Union of Foodstuff and Cattle Dealers Association of Nigeria (AUFCDN) led by Alhaji Ali Tahir. Buhari Buhari told the delegation that his administration had genuine intentions to eliminate illegal taxes in the country, despite the fact that ‘‘old habits die hard.’’ The President was responding to a request by the association on the need for the Federal Government to rein in on the unhealthy practice of illegal tax collections. He said: ‘‘I am appalled to learn that these illegal tax collections still persist. Bad habits are not easily dropped. ‘‘But let me assure you that relevant security agencies will be reminded of their duties in preventing these bad practices and safeguarding people like you who go about their legitimate businesses. ‘‘I will take up all your appeals and complaints in due course and together with State Governments, we will attend to your proposals.’’ While describing the association as very important and strategic to the nation’s economy, the President said: ‘‘The merchandise and products you trade in are basic to any economy. “The real wealth of this country lies in agriculture and livestock rearing.’’ He, therefore, pledged that the administration’s continuous assistance to the sector, noting that some of the more advanced countries like Argentina, Australia, New Zealand and Denmark built their economies primarily on agriculture and livestock trade. On the 2019 elections, Buhari welcomed the associations’ support for his administration, recalling that they also demonstrated their solidarity for his candidacy in the build-up to the 2015 elections. In his remarks, the General Secretary of the Union, Alhaji Ahmed Alaramma, declared that they would work for the re-election of Buhari because the administration has taken the country back to the path of sustainable growth. Alaramma appealed to the President to ensure that the “union is represented on the national campaign teams for the Buhari/Osinbajo re-election movement to enable it play the campaign role effectively’’. On the issue of illegal tax collections, he said: ‘‘Roadblocks are mounted by unknown persons on several highways including those in Adamawa, Taraba, Benue, Cross River, Ebonyi, Abia, Enugu, Anambra, Imo and Bayelsa States and these continue to constitute a hindrance to our businesses.’’ While commending the Buhari administration for the progress of work on the Lagos-Ibadan rail project, the group urged the Federal Government to establish a food and livestock market with close proximity to road and rail around Lagos-Ogun State expressway. Source: Vanguard