Tax in Nigeria is now a very big topic, and after my chats got filled with questions from Business owners about the Nigeria Tax latest, especially with the news that the Federal Government deadline for filing tax is here upon us, I have no choice than to record and publish this video. You can see that my dressing today on my Youtube video is as serious as the topic

Another reason I waited this long before publishing this tax article is because I have been taking my time to gather real information, not just hear and also, I made sure I personally file my tax, so that I dont just present theories, but tell you exactly what you need to do to be TAX Compliant and avoid the government tax penalty

So if you are a Small or medium scale business owner, Salary earner or just living in Nigeria, then this article is for you

Meanwhile, if you want me to help you register your business and help you with other Business compliance, you can reach out to me through my whatsApp contact detail 07033512807 or Muyiwa@cidimarketing.com. I also have a nice short tax breakdown for you if you want to quickly know how to file your tax, link also in video description.

YOU CAN ALSO JOIN MY FREE WHATSAPP GROUP IF YOU WANT TO GET BUSINESS UPDATES AND OTHER IMPORTANT INFORMATION

LET’S GET STARTED!

So, depending on when you are seeing this post, you might already have defaulted in filing your tax, and if not, let me guide you on what you need to do to keep yourself and your business free from tax penalties

First, About how a LTD is currently run. You have basically 3 types of TAX you want to be aware of, but even before we go to that, understand that your Company must be registered with the FIRS, or better still NRS immediately you register that company with the CAC

The NRS will help you enter your Company into the TAX PROMAX and validate your TAX ID that you got from the CAC and present you with a certificate that looks like this

Before now, you probably were able to get a bank account for you company with the JTB TIN which made you not register with NRS, that doesn’t exist again, in fact, you may be penalized for not registering with the TAX promax from scratch

If you dont register with the NRS, OR FIRS, after 6 months, you will pay a penalty of N50,000

And from the 7th month, you will start paying N25,000 per month until you register and get your TAX PROMAX issued. 

You may not be able to start your Tax filing properly until you have done this

So if you know you haven’t registered with the TAX PROMAX, do so immediately. If you want us to help you at Digital Quill, then reach out to me using the contact detail in the video description.

Now quickly note also that there is indeed a difference between TAX FILING and TAX Payment itself. You may not even qualify to pay tax at all, especially if you know how to avoid tax the legal way, that’s the truth. But filing tax means that you are updating the TAX authorities of your existence and your tax profile, even if you are not qualify to pay. 

So, not paying tax is not an offence, not filing is the office. Tax avoidance is not an offence, tax evasion is the offence.

Now that we have settled that, the first tax you want to settle as a LTD is your PAYE–This is the TAX deduction from the Salary of your workers, if you have employed. Again, your staff may not pay any tax if the amount you pay them is not within the TAX Range.

FIRST TAX

Technically, PAYE is also a form of Personal Income Tax. 

Again you can watch the video on Youtube @ digitalquill, I already broke down how you can calculate your STAFF PAYE or your PIT, So, even if your Staff are not within the taxable income range, you still must file it

All you have to do is to visit your State revenue office, really they will guide you on what to pay and how to pay it, and if you are not qualified to pay, they will also help you in fulfilling the filing

If you are filing the PIT under your company name, then they will request your Business TAX ID and you will also need to get the NIN of your staff because they will be needed too.

You may also be asked to submit your Business bank statement for the month under review or atleast just list out the salary record of your Company.

Honestly its that simple. Ideally, you should be doing this every once in a month

SECOND TAX

The second tax that you should be aware of as a LTD is the VAT or the Value Added Tax. This TAX is what you deduct from your customers and then remit to the TAX purse. I also explained how this is calculated in the video I earlier referred you to watch

But again, not every Company is eligible to pay VAX. For small Businesses which I believe many people fall under, you must be doing an annual turn over of atleast N50m before you can be mandated to remit VAT. Note also that you can choose to pay the VAT voluntarily.

But If you are a Professional service provider, then you have to file the VAT compulsorily, irrespective of your Annual turnover or estimated total asset.

Again remember, qualify or not, you must file for the VAT within the first 21 days of each month. If YOU FAIL TO, then you might be ready to pay a penalty fee of a N100,000 naira for failure to file, so please, even if you are not eligible to pay, JUST GO FILE.

THIRD TAX

The third TAX that you should be aware of is the Company Income tax OR THE CIT. This one is quite handy because you will only need to file just once in a year. Again, most small Businesses will not qualify to pay the CIT, but like I have repeated severally in this video already, YOU MUST SHOW UP and file. If you do by January of preceeding the December of the year under review, you should be good

Finally, let’s briefly talk about you that doesn’t run a business. It’s pretty simple if you are a salary earner. You are to pay your PAYE, but your Employer should be doing that on your behalf

And this is where Business name owners slip into the discussion. As far as the tax law is concerned, your business is not recorgnised separately from you. So what you are filing is just your PIT

Again, you do that at the state revenue office in your state of Business operation. You will need to get your BANK STATEMENT ready and then your NIN or your Business name TIN. Your tax will be determined based on the Nigerian tax law progressive tax regime and based on what is determined, you may just file your tax and if you dont fall within deductable bracket, then you wont have to pay. But again, you must present yourself

I believe I have done well and I want to believe I haven’t left any information out, if you think I did, or you have an objection to anything I have said, you can let us know in the comment section

Also, note that your auditor can help you with your tax calculations but really, except for CIT filing, hiring an Auditor may never be necessary. So this thing is not as complicated as you think

Please drop your comment and questions in the comment section, if you need my help, reach out to me through my whatsApp contact detail 07033512807 or Muyiwa@cidimarketing.com.

If you want me to help you register your business and help you with other Business compliance, you can reach out to me using the contact details written earlier. I also have a nice short tax breakdown for you if you want to quickly know how to file your tax, Its also on my Youtube page.