There is no doubt that we are living in unusual times. The COVID-19 pandemic has impacted various facets of life and changed the way things are being done. A lot of changes have been witnessed in day to day operations of businesses across the world. Some businesses were ground to a complete halt while some carried out skeletal operations to within permissible limits.
There are still compliance obligations which businesses are expected to meet regardless of the current state of things. These obligations include tax payments, filing and reporting of information, holding of statutory meetings, court appearances, etc. It is undeniably true that with the current state of things, businesses may not be able to meet these obligations for obvious reasons ranging from financial constraints to safety concerns. Therefore, there is a need for necessary adjustments to be made to enable businesses meet their obligations in this regard.
Some regulatory bodies and government agencies have rolled out guidelines and concessions regarding compliance for this period. This article will attempt to look at some of these areas where measures have been put in place to enable companies meet their compliance obligations in these present times.
The Federal Inland Revenue Service (FIRS) has given some concessions to tax payers and they are as follows;
Value Added Tax (VAT): The time for filing VAT and withholding tax has been extended from 21st to the last working day of the month, following the month of deduction.
Companies Income Tax (CIT) returns: The due date for filing CIT returns has also been extended by one month.
Unaudited accounts: Businesses may now file returns using unaudited accounts but must subsequently submit audited accounts within two months after the revised due date of filing.
Interests and penalties: The FIRS will also be waiving interests and penalties on outstanding tax debts if businesses pay their debts in full on or before 31st May, 2020.
Late returns penalty: This has been waived for businesses that pay early and file later. They can also email the supporting documents to the designated email addresses or submit hard copies to the offices.
Suspension of field audits, investigations and monitoring: The FIRS has suspended its regular Field audits, investigations and monitoring exercises till further notice.
Corporate governance obligations
Annual General Meetings: The Corporate Affairs Commission (CAC) released guidelines on holding of Annual General Meetings of Public companies by proxy. Highlights of the guidelines are as follows; Obtain approval of the CAC; Ordinary Business of an AGM as provided in S.214 of the Companies and Allied Matters Act (CAMA) shall only be discussed at the Meeting. In the event that there are any special business which is considered very urgent and necessary, the application letter shall provide the justification and the nature of the special business; Notice is to be sent to every member of the Company in accordance with the provisions of CAMA and evidence of same is to be shown to CAC; All the members shall be advised in the notice for the meeting that in line with the Government directive on physical distancing and the permissible limits on the maximum number of people in every gathering due to the Covid-19 pandemic, attendance shall only be by proxy with list and particulars of persons willing to act on their behalf as proxies for them to select therefrom. The Companies will bear the cost for issuing the notices as well as the stamp duties which shall be prepaid by the Company. The proxies do not have to be members of the Company; The Articles of the Company or provision of CAMA shall be relied upon with regards to a quorum for the Meeting. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one.
Board, committee and management meetings
The Nigerian Stock Exchange (NSE) released some guidance notes on holding of virtual Meetings by businesses. The key points from the guidance notes are as follows;
The Articles of the company or its board, committee, and management Charters or Terms of Reference should provide for and authorise virtual meetings; There must be adequate technology/equipment to enable a hitch free virtual meeting; The Agenda must be precise and circulated to all stakeholders. It must be strictly adhered to; The company secretary should work with the technology and information security team/personnel to come up with means of protecting virtual meetings from being hijacked, infiltrated, or manipulated. The company secretary is also advised to invite all meeting attendees to revalidate their connect at reasonable intervals; The company secretary should arrange for a dry run/rehearsal before the virtual meeting to confirm that all equipment to be deployed for the meeting are in good condition; The company secretary is to ensure a timely circulation of all meeting materials in line with CAMA and the Board/Committee or Management’s Charter or Terms of Reference, to give participants sufficient time and opportunity to read such materials and prepare for the meeting.
Some other guidelines and concessions by Regulatory bodies regarding compliance for this period will be highlighted in the concluding part of this article.