THE TAXAIDER NEWSLETTER VOL 2, ISSUE 8 (AUGUST 2020)

First Thoughts: Post-Lockdown Musings

I have often heard some people say they usually get their inspiration to write from rather uncomfortable situations and experiences. I say, ‘well done to them’. I guess I need to learn how they manage to do this. So, I’ve been in traffic for the last three hours and guys, I can’t seem to get any inspiration from this experience and putting down my ‘First Thoughts’ for today’s Newsletter has been quite a challenge. I have been looking from my laptop to the window repeatedly as we move at snail speed. Once or twice, I have been tempted to step out of the car to stretch my legs but hey, this is Lagos, and this is the Third Mainland Bridge! Anything can happen! Hopefully, I would get home before I am done with this piece.

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Approaching the Common Reporting Standard (CRS) Deadline: Important Information Your Financial Institution Should Know + Do

  1.  Nigeria’s Income Tax (Common Reporting Standard) Regulations 2019 (the Regulations) became effective on July 1, 2019. Nigeria’s Federal Inland Revenue Service (FIRS) is the administering agency.
  2. The Regulations places an obligation on all financial institutions in Nigeria to provide a report to the FIRS on all accounts (Reportable Accounts) maintained by their customers (Reportable Persons) that are not tax-resident in Nigeria or the United States of America (USA).
  3. Your financial institution does not need to provide a report to the FIRS on the accounts (non-Reportable Accounts) maintained by your Nigeria or USA-resident customers (non-Reportable Persons).
  4. Accordingly, and for the purpose of the Regulations, Nigeria and USA are non-Reportable Jurisdictions. All other countries are Reportable Jurisdictions.
  5. A person who has dual tax residency in a Reportable Jurisdiction and a non-Reportable Jurisdiction, is a Reportable Person and accordingly his/her account in your financial institution is a Reportable Account. For example, the accounts of a customer who is tax-resident in both Nigeria and Canada, is a Reportable Account.
  6. Your financial institution has an obligation to know the tax residence of all persons who maintain an account with it. Accordingly, you need to put in place a due diligence process that elicits this information from all your customers.
  7. Your financial institution must maintain a register, schedule or enterprise resource planning tool (ERP) (altogether, Report Register) that identifies all your Reportable Persons and Reportable Accounts.
  8. Your Report Register must contain information such as the following on all Reportable Persons and Reportable Accounts: Name, Address, Reportable Jurisdiction, Date and Place of Birth, Reportable Account Number, Tax Identification Number, Income (including interest, dividends and other income) earned by Reportable Person, and Reportable Account Balance as at end of the relevant period.
  9. Your financial institution must prepare and submit an annual Reportable Accounts Information (Information Returns) not later than Wednesday,  September 30, 2020 to the FIRS. Accordingly, Information Returns on all Reportable Persons and Reportable Accounts maintained in your financial institution in 2019 is due to be submitted to FIRS not later than Wednesday, September 30, 2020.

    Please note: The Reportable Accounts Information (Information Returns) should be submitted not later than May 31st of every year to the FIRS. Due to the COVID-19 Pandemic the deadline was extended. Please read more HERE.
  10. Your financial institution is still required to submit Information Returns even though you have no Reportable Accounts; in which case, a nil Information Returns will be filed with FIRS.
  11. FIRS may share your financial institution’s Information Returns with Nigeria’s counterpart countries further to Nigeria’s obligation under the Multilateral Agreement on the Automatic Exchange of Financial Account Information.
  12. Similar to your accounting records, your Information Returns are required to be kept for minimum of 6 years thereafter.
  13. FIRS may, by a notice in writing, additionally require your financial institution to furnish it, within a minimum of 14days, with any document or information on compliance with the Regulations.
  14. Failure to comply with any of these obligations will expose your financial institution to a maximum flat fine of ₦10million plus ₦1million for every month of breach. For emphasis, your obligations include: keeping your Report Register; filing your Information Returns correctly and accurately; and being ready at any time to supply FIRS with any document or information lawfully requested from your financial institution.
  15. You can employ the services of a service provider like Taxaide to assist with your due diligence and reporting obligation under the Regulations. Taxaide can also assist with the automation of your CRS compliance process including deploying a CRS-focused ERP.

For further enquiries on the subject, please contact Taxaide’s International Tax Desk at: itd@taxaide.com.ng or business@taxaide.com.ng;  +234 700 TAXAIDE; +234 1 631 0971-2; +234 810 701 7274.

A Series on Tax Relief – Part 4

Welcome to the fourth part of this series.

The gift that keeps giving comes in the form of Tax reliefs and that is why we keep coming back with this series on Tax reliefs. 

We have been reviewing the tax reliefs made available by the Federal and State Governments to taxpayers to cushion the effects of the COVID-19 pandemic.

So far, we have reviewed the tax reliefs made available in the following states: Lagos, Oyo, Osun, Delta, Bayelsa, Kebbi, Gombe, Jigawa, Bauchi, Akwa Ibom and Yobe States. You can read them HERE and HERE.

In this piece, we would be reviewing the tax reliefs made available in Ondo and Ogun States:

The Ondo State Internal Revenue Service (ODIRS) has made the following tax reliefs and palliatives for taxpayers in the State:

i) The implementation of the Hotel, Restaurant and Event Center Consumption Tax due to start on 1st June 2020 is suspended in view of the peculiarly harsh impact suffered by the Entertainment/Hospitality sector.

ii) The full implementation of the Land Use Charge rates based on property valuation is suspended. The existing amnesty rates for Residential Property will subsist as follows: High Value Zone (HVZ): N7,000.00-10,000.00, Medium Value Zone (MVZ): N3,000.00 – N5,000.00, and Base Value Zone (BVZ): N1,000.00 – N3,000.00 per annum.

iii) Penalty and Interest on arrears of Land Use Charge from year 2017 to 2019 is hereby waived for residential property. This waiver applies to those that make payment on or before 31st December 2020.

iv) The minimum tax payable under the Presumptive Tax Regime (Artisans, Market Women, etc.) in the state has been reduced by 50% for year 2020 only.

v) The deadline for the submission of Form A for employees and Annual Returns in accordance with Sections 41 (3) & 81 (1-3) of the Personal Income Tax Act (PITA) 2011 as amended, for companies operating in Ondo State is extended to 30th September 2020.

vi) The penalty hitherto being charged on late remittance of Pay As You Earn (PAYE) deductions has been waived between March and September 2020 for all sectors.

The Ogun State Internal Revenue Service issued the following tax reliefs and palliatives for taxpayers in the State:

i) Extension of deadline for filing of 2019 Income Tax Returns by self-employed individuals/informal sector by six months from 31st March to 30th September 2020.

ii) Extension of filing of 2019 Annual PAYE operators/tax agents by eight (8) months from 31st January to 30th September 2020.

iii) Complete waiver of interest and penalty for late filing of 2019 Annual PAYE returns during the approved extension period

iv) Complete waiver of interest and penalty for late remittance of monthly PAYE from 31st January to 30th September 2020.

v) Complete waiver of interest and penalty for late payment of Direct Assessment/Personal Income Tax by self-employed individuals from 1st January to 31st December 2020.

vi) Waiver of weekly tax by operators/promoters in pool and betting business from 1st April to 30th June 2020.

Taxaide®’s professional personnel are licensed tax practitioners who can assist you with your Tax compliance process.

For more information on all tax-related issues, please do not hesitate to contact us at:

Tel: +234 700 TAXAIDE (070 829 2433), +234 1 631 0971
WhatsApp: +234 810 701 7274
Email: business@taxaide.com.ng
Website: www.taxaide.com.ng

A Series on Tax Reliefs – Part 3

Welcome to the third part of this series.

We have been reviewing the tax reliefs made available by the Federal and State Governments to taxpayers to cushion the effects of the COVID-19 pandemic.

So far, we have reviewed the tax reliefs made available in the following states: Lagos, Bayelsa, Kebbi, Gombe, Jigawa, Bauchi, Akwa Ibom and Yobe State. You can read them HERE.

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