It’s hardly news that we are in the last few months of 2020 and just like you have visions and goals every year, you should adopt same for your tax obligations in 2021.
The first quarter of every year is a crucial period in the tax compliance space in Nigeria. The first quarter ushers in the PAYE and PIT returns filing process. In this piece we would review the PAYE returns filing process as this is what is required first before the PIT filing returns.
1. What exactly is the PAYE returns filing and what does it involve?
PAYE Returns details all emoluments paid to, and statutory deductions made, on behalf of all employees (whether or not they are still in your employment) in the preceding year in this case which would be from January 1, 2020 to December 31, 2020 as well as taxes that were remitted to the Relevant Tax Authorities (RTAs) in respect of the employees that were resident within their jurisdiction.
To break this down further, PAYE returns filing is the process of informing the RTAs of the total income you paid to your employees and the total tax you remitted from their income in 2020 even if they are no longer in employment with your organisation.
2. What Then Happens If I Decide Not to File PAYE Returns on Behalf of my Employees?
You should be ready to pay the cost of non-compliance. What is the cost of non-compliance? Failure to comply with the requirement to file PAYE Returns by the due date attracts a penalty of N500,000.00 (Five Hundred Thousand Naira) for corporate bodies and N50,000.00 (Fifty Thousand Naira) for individuals and/or an imprisonment term of six months in the event of default of payment.
These are stiff and hefty penalties in my opinion! Better safe than sorry!
3. When is the deadline for Filing the 2020 PAYE Returns?
The deadline falls on January 31, 2020 which is Sunday. Therefore, the returns filing process must be made no later than Friday, January 29, 2020.
4. How Do I go about the PAYE Returns Filing Process? What if I require Assistance?
This in itself is a very valid question. Are you aware that there could be unforeseen circumstances that could result in errors in your monthly payroll computations? For instance, if bonuses were paid or reductions made to your employees’ salaries thus leading to a change in the usual salaries paid. This instance could result in either under-deducting or over-deducting PAYE from your employees’ income.
The Annual PAYE returns filing presents an excellent opportunity to amend any errors by computing your payroll on an annual basis, thereby giving you the opportunity to balance out any over/under-deduction that may have occurred.
If you require assistance with the PAYE returns filing process, then you most definitely should reach out to Chartered Tax Professionals. The Chartered Institute of Taxation of Nigeria (CITN) currently has in excess of 1,000 chartered or licensed tax practitioners who are able to assist with PAYE compliance requirements. Taxaide®’s Professional Personnel are among such licensed tax practitioners.
For more information on PAYE AND PIT Returns Filing and all tax-related issues, please do not hesitate to contact us on:
0700TAXAIDE or payrolldesk@localhost or business@localhost.
Let’s have a Tax-Efficient 2021!
