09 Jan 2017
January 9, 2017

Monthly and Yearly Tax Compliance

Every business owner must put structures in place to ensure its operations are carried out effectively and efficiently. One of the systems the management of an entity need to put in place is its tax remittance process. There are specific taxes that needs to be remitted on a monthly basis, some one off while other are yearly remittance. An entity can have an in house tax department or outsource its tax compliance to a consulting firm

PAYE, VAT and WHT are to be remitted on a monthly basis to relevant tax authority within stipulated time frame.

  • PAYE – Deductions from staff salary is to be remitted on or before 10th of every succeeding month
  • VAT – The difference between input and output VAT for preceding months must be filed on or before 21st of the succeeding month
  • WHT – This is to be remitted within 21 days of deduction.

Some remittance are done on a yearly basis, these includes

  • Annual Returns to Internal Revenue Service – Every entity is to file returns of all its PAYE deductions and remittance of preceding year on or before January 31st of every year.
  • Business Premises – N 10,000.00 for first year, and N 5,000.00 for subsequent years.
  • Development Levy – N 100.00 per employee
  • Income Tax – Filing for the fist year of operation is 18 moths after operation, six months after year end for subsequent years. the current rate is 30% of taxable profit. The entity is to submit its audited account which would serve as the basis of assessment.
  • Education Tax – This is 2% of the company assessable profit.
  • Information Technology Tax –  Payable be specific companies at the rate of 1% profit before tax.

We advice timely and prompt compliance to avoid payment of penalties and interest. It should be noted that penalties and interest on default is an avoidable cost and the best way to manage tax compliance is to plan for it and if possible it should be paid at the point of paying staff salary.

Wishing you a profitable 2017!

 

 

 

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