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EXPLANATIONS ON CURRENT TAX ISSUES IN NIGERIA

28 August 2020
28
August 2020
  1.  All tax payers, whether qualify to pay tax or not, have to file annual tax and monthly Value Added Tax returns
  2. Withholding tax will continue to be deducted from advance payments for qualified amounts but refund can be sought by SMEs for those not in the tax paying bracket
  3. Determination of qualifying SMEs whose Turnover is not up N25m and so not qualify to pay CIT, VALUE ADDED TAX and EDT will be determined on preceding year basis
  4. When an SMEs' turnover clocks N25m and above, it will be expected to register for VALUE ADDED TAX and pay all taxes
  5. Tax exemptions for N25m turnover and below includes enterprises and individuals which pay taxes to state governments
  6. Minimum tax is not applicable any longer for entities within tax exemptions
  7. Value Added Tax is now to be made on cash transaction basis and not on receivables
  8. Many more items have been exempted from Value Added Tax, therefore consumers should be aware because at point of payments for several items bought, and sellers can charge 7.5% on all and only remit for qualifying Value Added Tax expenses
  9. Contract Invoices already raised and presented for payment before 1st Feb 2020 will still be at 5% VALUE ADDED TAX even after commencement date of 7.5% Value Added Tax
  10. Education tax is also exempted for businesses, including enterprises, with N25m and below
  11. Value Added Tax exempt for businesses of N25m and below does not exempt them from paying Value Added Tax at 7.5% but cannot charge such Value Added Tax and therefore would not register for VALUE ADDED TAX from this year.
  12. All individuals and entities are required to obtain TIN and tax authorities can have access to their tax information
  13. Federal Inland Revenue Service currently has access to bank transactions of N5m and above of customers 
  14. All liens placed on bank accounts of customers have been lifted by FEDERAL INLAND REVENUE SERVICE and that era may not occur again except for tax payers with established tax liabilities
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