There is a common saying that the only thing certain in life are death and taxes. For the purpose of this piece, we would narrow down on the taxes bit. Taxes are always seen as burden to taxpayers and most individuals seek for various means to reduce their tax liabilities. The focus of this piece is to address some misconceptions that exist on the question of when tax compliance can actually be said to be complete. A lot of taxpayers believe once they make the relevant payment of their taxes then compliance is complete. They would rather not have any further interaction with the Relevant Tax Authority/ States’ Internal Revenue Service (SIRS).
Clearly, there is a misunderstanding between what the average taxpayer thinks is compliance and what the tax authority expects as compliance simply because filing tax returns with the SIRS is as important as the remittance/payment of taxes and this assures the fulfilment of your tax obligation.
To be tax compliant, a taxpayer (corporate or individual) must ensure that his/her taxes are paid, and returns are filed with the relevant tax authorities in the manner prescribed by the SIRS from time to time within the stipulated period. In line with section 41 and section 81 of the Personal Income Tax Act (PITA), all taxable persons are required, without notice or demand, to file their income and taxes in the prescribed form and containing the prescribed information with the tax authority of their state of residence for each year of assessment. A good incentive for taxable persons who earn N30,000 or less is that they are exempted from Personal Income Tax (PIT) therefore, they are not required to file tax returns.
What does the Tax Return Filing entail?
The filing returns should contain income earned from every source, in the year preceding the year of assessment computed in line with the provision of PITA. These returns are expected to be filed by individuals who are self-employed by way of direct assessments as well as those who are in paid employments under the Pay-As-You-Earn (PAYE) scheme. The individual’s annual returns (Persons who earn other incomes outside of their employment income) are to be filed not later than 31st March every year and covers the income earned and taxes paid in the preceding year. Failure to comply with the requirements to file returns will attract a penalty of N50,000 (Fifty Thousand Naira only).
It is also noteworthy to mention that employers of labour are mandated by the provisions of Section 81 of PITA to file annual returns of all emoluments paid to their employees and taxes deducted and remitted to the relevant tax authorities. The employer’s annual return is to be filed not later than 31st January of every year and covers the income earned and taxes paid in the preceding year. Failure to comply with the requirements to file employer annual returns by the due date attracts a penalty of N500,000 (Five Hundred Thousand Naira Only).
Remittance of Personal Income Tax or Pay-As-You-Earn (PAYE) is not just enough but remittance and filing of PIT/PAYE returns will complete the cycle.
How can Taxaide Assist?
We are accordingly able to, on individual levels, advise and assist taxpayers with their tax compliances and tax authority engagements.
As at today, our operations extend to all States in Nigeria, including the Federal Capital Territory (FCT). We also assist Clients with dual/multiple tax residencies (that is, who in addition to Nigeria, maintain tax residence in other jurisdictions) to manage their Nigerian tax obligations, taking full benefit of the tax rebate options afforded them by law. At the heart of all our tax services, is to ensure that our Clients sustainably minimize their tax pay-outs while ensuring optimal compliance.
For more information on Personal Income Tax Returns Filing and all tax-related issues, please do not hesitate to contact us at:
Tel: +234 700 TAXAIDE (0700 829 2433), +234 1 631 0971
WhatsApp: +234 810 701 7274
Email: pitdesk@localhost, business@localhost
