The Nigerian tax landscape is fraught with a number of statutory and administrative peculiarities that could increase the risk and costs for the non-discerning business. Pedabo provides advice on tax planning with an objective of minimizing the organisation’s tax burden through a careful and deliberate structuring of the company’s activities.
Company Income Tax
The objectives of our corporate taxation services are to ensure that the tax liability in the audited accounts is correctly stated on a yearly basis and to facilitate the process of obtaining the companies tax clearance.
Key aspects of our services are as follows:
- Computing annual company capital allowances and tax liabilities;
- Making annual returns to the tax authorities;
- Obtaining corporate tax clearance certificates;
- Tax advisory services including statutory responsibilities in respect of withholding tax;
- Processing of certificate of acceptance for all capital expenditure to be able to claim capital allowance.
Nigeria operates a VAT system that is governed by the VAT Act of 1993 (amended up to 2007). The law requires all businesses operating in Nigeria to register for VAT and to charge VAT on all relevant transactions, collect an account for the VAT charged to FIRS on a monthly basis.
Nigeria also operates a Withholding Tax (WHT) system based on specific provisions in the various income tax laws. Businesses are mandated to deduct WHT on behalf of the government at the point of payment for qualifying services.
Our service in this regard is to ensure proper and timely compliance with the VAT Act and WHT system on routine compliance and occasional services in the following areas:
- Proper keeping of VAT records and filing of VAT returns on a monthly basis;
- Remitting VAT charged and claiming refund where applicable;
- Liaison with the Integrated Tax office in respect of any VAT issues raised;
- Computation and review of monthly WHT deductions against payment vouchers;
- Advice on WHT payable;
- Guide appointed officers on preparation of appropriate documents for payment of WHT to the respective tax Authorities.
Personal Income Tax
Our personal taxation services are geared toward ensuring that employees are subjected to the minimum possible taxation, through innovative income distribution schemes. Further, we would handle personal income taxation matters on behalf of employees in the following areas:
- Staff salaries structuring and PAYE tax planning;
- Registering the company with the relevant state Tax Office for the purpose of PAYE;
- Obtaining personal income tax forms and remittance cards for employees;
- Determining the correct amount of tax payable by each employee and remitting same to the tax office;
- Obtaining tax clearance certificates for employees;
- Liaison with relevant state tax authorities and consultants during PAYE and Withholding tax audit;
- Filing of annual tax returns;
- Filing of Directors Annual returns and processing Tax Clearance Certificates;
- Generally advising on other levies and taxes due from the bank.
The Nigerian government, through the Federal Inland Revenue Service (FIRS) joined the rest of the world by issuing its transfer pricing regulations known as the Income Tax (Transfer Pricing) Regulation No 1, 2012 with effect from August 2012. The objectives of the regulations include:
- Reduction of the risk of economic double taxation;
- Provision of level playing ground between MNCs and local companies in Nigeria;
- Provision of certainty of transfer pricing treatment in Nigeria;
- Elimination of cross border tax evasion.
The regulations cover dealings between related parties and/or persons both locally and internationally.
The regulations require related or connected entities to prove that transactions between them are at arm’s length.