Nigerian companies warned against tax non-compliance


LAGOS, (CAJ News) – NIGERIAN companies have been urged to adopt automated payroll systems and processes to enable compliance with the demands of an increasingly tough local tax regime.

Magnus Nmonwu, Regional Director for Sage West Africa, said a hard-line attitude to non-compliance from the Nigerian federal and state tax authorities meant companies must get all their processes and paperwork in order to avoid tax troubles in the coming months.

Nigeria’s Federal Inland Revenue Service recently said it would crack down on tax evaders by conducting audits of companies doing business in Nigeria to ensure that they are compliant with the various taxes due to the country.

Furthermore, a law enforcement exercise saw the Lagos Inland Revenue Service temporarily seal the premises of 10 firms for failing to remit N45,52 million Personal Income Tax of staff to the state government.

“These actions show that Nigeria’s tax authorities are taking a zero-tolerance approach to non-payment of tax or incorrect remittances of taxes to the government, whether the reason is a deliberate evasion or an accidental oversight,” Nmonwu said.

The expert said with companies in Nigeria coming under more scrutiny for their tax affairs, it was essential to put in place systems and processes that helped them easily comply with tax regulations.

The Nigerian Personal Income Tax Act states that employers are required to file annual returns of all remuneration paid to their employees and taxes deducted and remitted to the tax authorities on or before 31 January every year.

Failure to do so carries a maximum penalty of N500 000 for the employer and N50 000 for individuals.In addition, employers must remit Pay-As-You-Earn (PAYE) tax each month for each employee to the relevant state internal revenue services, on or before the 10th day following the month in which salary was paid.

Furthermore, employers and employees are each required to contribute 10 percent and 8 percent respectively of their employee’s monthly remuneration to the Nigeria’s contributory Pension Scheme. There are also other statutory payments, such as the Employee Compensation Scheme (formerly known as the Workmen Compensation Act), Development Levy, National Housing Fund and Industrial Training Fund.

– CAJ News

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Posted by on Sep 24 2015. Filed under Africa & World, Finance, Finance & Banking, National, Regional. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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