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01/05/2023

HAPPY WORKERS' DAY TO ALL NIGERIAN WORKERS.

Happy Workers' Day to all Nigerian workers! Today, we celebrate the contributions and achievements of the hardworking men and women who keep our country moving forward. From the farmers in rural areas to the bankers in the cities, every worker plays a vital role in our nation's prosperity.

This day is an opportunity to recognize and appreciate the efforts of Nigerian workers. It is also a time to reflect on the challenges that workers face and to come together to find solutions to improve their working conditions.

Nigerian workers have made significant contributions to the country's development. They have built roads, bridges, and other infrastructure that have improved the lives of millions of Nigerians. They have also worked hard to build the country's economy by producing goods and services that have created jobs and generated income.

Despite their contributions, Nigerian workers face many challenges. Many work long hours for low wages and have limited access to social protections such as health care and pensions. Others work in dangerous conditions without proper safety measures. These challenges make it difficult for workers to provide for themselves and their families and to achieve a decent standard of living.

It is important for the government and employers to work together to address these challenges and to improve the lives of Nigerian workers. This can be done by implementing policies that support decent work, such as providing fair wages, safe working conditions, and access to social protections. Employers can also play a role by investing in their workers and creating opportunities for them to develop their skills and advance their careers.

On this Workers' Day, let us celebrate the contributions of Nigerian workers and commit to working together to create a better future for them. May Nigerian workers never work in vain, but rather, may they continue to play a vital role in building a prosperous and inclusive Nigeria.

22/02/2023

30/12/2022

RESTRICTION OF AUDITOR'S LOGO, BRAND AND OTHER FORMS OF IDENTITIES IN THEIR CLIENTS' FINANCIAL REPORTS.

02/12/2022

NIGERIA CORPORATE TAX ADMINISTRATION ,2022.
Taxable period
The taxable period is the fiscal year, which runs from 1 January to 31 December.

Tax returns
Companies are required to register for tax and file their audited accounts and tax computations with the FIRS within six months of their financial year-end on a self-assessment basis or 18 months after incorporation (whichever comes first). A company may file an application for extension of filing tax returns for up to two months at the discretion of the FIRS.

Upon registration, a company is issued a TIN, which serves as the company's file number for all federal taxes and future correspondence with the FIRS.

The company must file the following documents with the tax authority on an annual basis:

Tax computation for the relevant year of assessment.
The audited financial statements for the respective period; this should be in conformity with the International Financial Reporting Standards (IFRS).
A duly completed and signed self-assessment form for CIT.
Evidence of remittance of the income tax liability (partly or in full).
PPT/HCT is payable on an actual year basis. Estimated tax returns must be filed within two months of the fiscal year. Actual tax returns should be filed within five months after the end of the accounting period, that is, not later than 31 May.

Assessment
Nigerian companies file their tax returns based on a self-assessment system where the taxpayer prepares its annual returns and determines its tax liability. However, the FIRS may apply a best of judgment (BOJ) assessment where it is of the opinion that the tax returns filed are deliberately misstated or where no returns are filed within the stipulated period.

Payment of tax
CIT
A company that files its self-assessment within six months after the accounting year-end can apply to the FIRS in writing to pay its income tax in instalments. The maximum number of instalments the FIRS may approve is three. Such application must go with a portion of the tax liability. It is due on or before the due date for filing.

Large companies are granted a bonus of 1% against income tax of future tax years (2% for medium companies) where the income tax is paid 90 days before the due date for filing.

Assessments are made on a preceding year basis. This means that the financial statements for a period ended in 2017 will form the basis for the 2018 year of assessment.

PPT/HCT
Payments with respect to PPT/HCT in any accounting period of 12 months are made in 12 instalments, with a final 13th instalment (if there is an underpayment). The first instalment for the year is due by the end of March.

Penalty for non-compliance
Failure to file CIT returns attracts a penalty of NGN 25,000 for the first month and NGN 5,000 for each subsequent month of default. Late payment of CIT attracts a 10% penalty and interest at the commercial rate.

Late submission of PPT returns attracts an initial penalty of NGN 10,000 and NGN 2,000 for each day such failure continues, while late payment of tax attracts a penalty of 5% of the tax not paid.

Tax audit process
Generally, the tax authority will commence a desk examination of a taxpayer's returns immediately after filing. This may be followed by a tax monitoring exercise whereby tax officers visit taxpayers to conduct an interview and on-site high-level review of their tax affairs.

Random or specific tax audit may be carried out usually within six years of filing tax returns. In unusual cases, a back-duty tax investigation may be conducted for more than six years, especially where a tax fraud or wilful default is suspected.

In the past, tax audits took a long time to conclude, usually between three to five years. However, the tax authorities are seeking ways to improve the average turnaround time.

In 2018, the Joint Tax Board issued a collaborative framework for cooperation between the FIRS and the state tax authorities. This indicated that there is now clear movement in improving collaboration after many years of simply discussing the concept.

Statute of limitations
The tax authority may carry out a tax audit and issue an additional assessment within six years from the relevant tax year. However, the limitation does not apply in the event of a fraud, wilful default, or neglect by the company.

Topics of focus for tax authorities
The tax authorities are currently exploring ways to generate more tax revenue. As a result, certain areas of taxation, such as tax collection, increasing the tax base, transfer pricing (most especially pricing for commodities, intangibles, etc.), tax transparency, filing of tax returns by PEs, and review of tax incentives and waivers have become a central focus for tax authorities.

There has been increased scrutiny by the FIRS on related-party transactions as a way of preventing taxpayers from shifting profits away from Nigeria. It is expected that transfer pricing audits are expected to be an area of focus in the next one to two years.

Further, for non-resident entities that create a PE in Nigeria, the tax authorities are focused on ensuring that they file full tax returns, including audited accounts, as opposed to filing on a deemed-profit basis. It is expected that the expenses of these PEs will be scrutinised for tax deductibility.

The tax authorities at the federal and state levels are sealing up companies, putting up non-compliance stickers, and holding principal officers of organisations to public scrutiny and prosecution under the tax law for non-compliance in terms of tax default or failure to make timely payments or to file tax returns. On a related note, the Lagos state government has set-up a rapid tax prosecution unit to prosecute tax evaders with considerations to a jail term.

The FIRS has started writing to banks to appoint them as collection agents of taxpayers considered to be in default of tax payments. In order to achieve this, the FIRS is directing the relevant banks to freeze the accounts of the taxpayers to prevent them from drawing funds from the accounts. This practice has been put on hold based on case law, which was decided against the FIRS and the banks.

The Finance Act 2020 amended Sections 25 & 26 of the FIRS Establishment Act, granting the FIRS powers to:

deploy proprietary or third-party payment processing companies or digital platforms as agents to collect taxes due on international transactions in the supply of digital services
deploy technology to automate the tax administration process, including assessment, collection, and information gathering, provided that it gives the taxpayer a notice of 30 days, and
receive assistance in the collection of revenue claims or other tax matters relating to agreements between Nigeria and other countries or bodies.
The FIRS has released the TaxPro-Max platform for tax compliance. TaxPro-Max becomes the channel for filing naira-denominated tax returns. It is expected that this platform will be updated for foreign currency returns in the near future.

The Finance Act 2021 provided that the FIRS is the only tax authority to account for taxes due to the Federal Government.

23/11/2022

TIME FRAME FOR PAYMENT OF TAX ASSESSMENT.

The tax charged by any assessment that is not objected or appealed within 30 days after the service of such notice shall be payable to the service. The time frame may be extended by the service based on its discretion. Where there is objection, the assessment shall be suspended until the determination of such objection or appeal. However, the company is expected to pay the undisputed portion of the assessment. Once the objection or appeal is determined, the service will issue a revised assessment that shall be payable within 30 days from the date of such notice.

Every company can make payment of tax due in one lump sum or in instalments; the final instalment must be paid on or before the due date.

Any balance of tax that remains unpaid after the due Taxes due shall be paid in the currency in which the income is derived or received. Medium-sized companies shall enjoy a tax rebate of 2% of tax due if such tax is paid 90 days before the due date while other companies shall enjoy 1%. Such rebate will be available as a credit against future taxes.

Time frame for payment of tax assessment
The tax charged by any assessment that is not objected or appealed within 30 days after the service of such notice shall be payable to the service. The time frame may be extended by the service based on its discretion. Where there is objection, the assessment shall be suspended until the determination of such objection or appeal. However, the company is expected to pay the undisputed portion of the assessment. Once the objection or appeal is determined, the service will issue a revised assessment that shall be payable within 30 days from the date of such notice.

Every company can make payment of tax due in one lump sum or in instalments; the final instalment must be paid on or before the due date.

Any balance of tax that remains unpaid after the due Taxes due shall be paid in the currency in which the income is derived or received. Medium-sized companies shall enjoy a tax rebate of 2% of tax due if such tax is paid 90 days before the due date while other companies shall enjoy 1%. Such rebate will be available as a credit against future taxes.

20/11/2022

OVERVIEW OF WITHHOLDING TAX IN NIGERIA 2022.

WITHHOLDING TAX LAW AND COVERAGE.
Withholding Tax in Nigeria is a form of advance payment of income tax. It is a payment on account of the ultimate income tax liability of the taxpayer or company. Withholding tax (WHT) is not a separate tax on its own and does not confer an exemption from the filing of annual tax returns by any company which had suffered WHT deductions. The WHT is normally deducted at source when payment is to be made to a okhe Information Circular published No: 2006/02 published in 2006 by the Federal Inland Revenue Services(FIRS) provides more insights on withholding tax practice in Nigeria.

WHT Coverage

The withholding tax (WHT) deduction covers the following transactions or areas:

All aspect of the building, construction and related services.
All types of contract and agency arrangement, other than outright sale and purchase of goods and property in the ordinary course of business.
Consultancy, Technical and Professional services
Management services
Commissions
Interest and Royalty
The introduction of the WHT regime came about in order to address the problem of tax evasion although, there is the overriding objective of full disclosure, transparency, predictability and fairness.

20/11/2022

STARTUP ACT AND TAX INCENTIVES IN NIGERIA. OFFICIAL GAZETTE 21-10-2022.

The Nigerian Senate passed the Nigerian Startups Bill on July 20, 2022, and this was signed into Law by President Mohammadu Buhari on Wednesday 19 October 2022.

Major Highlights of the Startup Act and Tax Incentives are as follows:

1. The Act stipulates, among other things, a company must be a registered limited liability company that has been in operation for no longer than 10 years from the date of formation to be entitled to the name startup.

2. Startups have access to a unique startup fund established under the Act. The Startup Investment Seed Fund established by the Act is only intended for startups.

3. According to the provisions of the Industrial Development (Income Tax Relief) Act, a labeled startup may be entitled to exemption from paying income tax or any other tax chargeable on its income or revenue for three years, and an additional two years if still within the period of a labeled startup, provided that the tax relief begins on the date of the issuance of the startup label.

4 Non-resident corporations that provide technical, consulting, professional, or management services to a designated startup are liable to a 5% withholding tax on income resulting from such services, provided that payment of the withholding tax is the last tax to be paid by such non-resident companies.

5. Gains arising from the disposal of assets by an angel investor, venture capitalist, private equity fund, accelerators, or incubators about a designated startup are exempt from capital gains tax if the assets have been held in Nigeria for a minimum of 24 months. etc

6. The Act's main objective is to establish Nigeria as an important tech hub in Africa. This is why it aims to improve the ease of doing business in the Nigerian tech sector and encourage domestic and international investment in the startup ecosystem for technology; amongst others.