15 Mar 2018
March 15, 2018

Tax Matters

Entities taxable under Nigeria tax lax are expected to make specific returns at regular intervals. Those related to Monthly compliance are summarised below.

Paye As You Earn (PAYE) – Every employer of labour is unpaid agent of the government. At the point of paying staff salaries, the employer is expected to deduct PAYE and remit it to relevant tax authority of the staff state of residence within 10 days of deduction(10th of every month). Failure to deduct or deduct and not remit attracts payment of amount due with penalties and interest.

Value Added Tax (VAT) – Entities are expected to add 5% to their product / services sales price in form of tax. This is to be remitted to Federal Inland Revenue Services (FIRS) on or before 21st of every month. Entities that have offset-able input VAT would deduct it from output VAT and remit the difference to the government. Non deduction and remittance attracts payment of the amount due with penalties of N5,000.00 monthly till the default continues.

Withholding TAX (WHT) – This is not a type of tax but a means of collecting tax from taxable entity (Corporate & Individuals). Entities are expected to withheld a percentage of the amount payable to service supplier/goods provider. The withheld amount is to be remitted to relevant tax authority within 21 days of withheld. Specific transaction has specific rate to be applied. Non compliance attracts payment of the amount with penalties and interest.
We advise timely compliance to avoid interest and penalties as it is an avoidable cost.

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