• Thursday, May 30, 2024
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Role of tax returns in tax administration (2)


Time of Filing

Section 55 (2) (a) and (b) further stipulates that filing of returns by companies shall be as follows-

Existing Companies

(a) “in the case of a company that has been in business for more than eighteen months, not more than six months after the end of its accounting year;

Newly Incorporated Companies

(b) In the case of a newly incorporated company, within eighteen months from the date of its incorporation or not later than six months after the end of its first accounting period, which ever is earlier.”

Request for late submission

A company may request in writing for approval to submit accounts at a later date, in view of any peculiar circumstances, e.g. fire disaster or need to obtain prior approval before submission. This must be specifically approved in writing by the relevant Tax Authority

Late filing

The due date of filing must be observed or else penalties would be imposed for late filing.

Role of Front Office Desk/Acceptance of Returns

In FIRS, the Front Office Desk has a vital role to play in returns-filing and acceptance of such returns. An FIRS Circular on Filing of Returns, stipulates that the income tax returns to be submitted by a typical corporate taxpayer to the Front Desk of a Tax Office such as Large Tax Office or Integrated Tax Office or Small and Medium Tax Office of the FIRS are to include the following:

• Taxpayer Identification Number (TIN);

• Duly completed self-assessment forms (Companies Income Tax and Tertiary Education Tax ) duly signed by a Director who must be the Chairman or the Managing Director of the company or the Secretary;

• E-ticket as an evidence of direct payment of the whole or part of tax due into a collecting bank;

• The annual Reports, audited or statement of affairs (as applicable).

• Financial Statements (to contain the Auditor’s Report which must be affixed with the seal of the principal partner of the firm, the Director’s Report, the Balance Sheet duly signed by two Directors, the Income/ Chairman’s Statement, Cash Flow Statement/Value Added Statement and five Year Financial Summary)

• Creditors and Debtors Schedules.

• capital allowances computations; along with schedule of fixed assets.

The return must contain tax Computations; Company Income Tax, Education Tax, Capital Gains Tax (CGT), and Information technology Levy if applicable; the minimum tax computation should also be included where applicable. Since there is no separate self-assessment form for CGT, the tax computation of the CGT must be filed along with that of companies income tax.

In addition to submitting the documents listed, any company that is rendering the returns is obliged to disclose information (which must be endorsed by a Tax Practitioner) relating to the incomes that suffered tax deduction, Pay As You Earn deducted and remitted, output Value Added Tax charged on its invoices, and expenditure which suffered input VAT.

Currency of Assessment

Returns are to be filed in the currency in which the transaction giving rise to the assessment was effected.

Penalty for late returns filing

At the expiration of the due date for submission, a penalty of N25,000 is immediately imposed on any defaulting company.

o A penalty of N5,000 is imposed for every month that the default continues.

o This action must be routinely carried out and does not provide concession/waiver for any company, including those applying for extension of the date of filing, unless such a request for extension of submission of returns was preceded or supported with full or part payment.

Furthermore, interest would also be imposed on companies who fail to pay taxes that are due in accordance with the law.

Continues next week

Teju Somorin is the Vice President, Chartered Institute of Taxation of Nigeria and a retired acting coordinating director, FIRS