Taxes new businesses in Nigeria ought to be aware of

Taxes new businesses in Nigeria ought to be aware of

Ajibola Sogunro briefly shares more information on taxes in Nigeria, especially for the interest of new business owners.

 

  1. The Nigeria tax system is built on three things (known as a tripod tax system) namely: legislation, policy and administration. Do these three components go hand-in-hand?

Not really because the tax authority usually come up with circulars that are at times not in alignment with the interpretations of tax legislations. In addition, until recently, tax policies and tax legislations have not been frequently reviewed.

  1. Taxes in Nigeria fall into two categories: federal taxes and state taxes. What should businesses be aware of here? What are the differences and do businesses have to pay both federal and state, or does it depend?

Businesses should be aware of the relevant tax types that are administered separately by the federal and the state tax authorities.

The major difference is that while the federal administers taxes relevant to corporate bodies, the state tax authority administers taxes relevant to individuals.

Businesses usually do not have to pay the same class of taxes to both the federal and the state authorities. It depends on the nature and the type of transaction and the tax person involved i.e. corporate body or individual. However, businesses may be required to pay some levies to the state where they are operating.

  1. What are the different taxes new businesses ought to be aware about?

Corporate Tax – Income Tax; Value Added Tax; Personal Income Tax for employees; Tertiary Education Tax; Withholding Tax; Capital Gains Tax; Stamp Duties and other tax related levies.

  1. Is this the same for foreign businesses?

No.  There are cases of exemptions with respect to Tertiary Education Tax; Value Added Tax on exported services where some services are rendered to or enjoyed by foreign businesses.

  1. When do companies fall into trouble? What should they be aware about?

When there is a compliance failure, particularly where they do not have the right information about the relevant tax compliance requirements in Nigeria, all the relevant tax compliance requirements and the expected tax obligations.

 

AJIBOLA SOGUNRO (ACA, ACTI, ACE, MNIM)

Senior Manager, Tax & Regulatory Services

07030806046

ajibola.sogunro@siao-ng.com

I am Ajibola Sogunro, a graduate of Economics (First Class Hons.) from Olabisi Onabanjo University (formerly Ogun State University), Nigeria. I am an associate member of reputable professional bodies such as the Institute of Chartered Accountants of Nigerian (ICAN); the Chartered Institute of Taxation of Nigeria (CITN); the Institute of Chartered Economists of Nigeria (ICEN) and the Nigerian Institute of Management.

I started my tax practice career in 2010. I am a seasoned professional cum tax expert who provides cutting edge tax solutions to clients across different industries (Manufacturing, Telecommunications, Health, Insurance, Financial Services, Agriculture, Aviation, Oil & Gas, Education, Servicing industry, etc.) including both the private sectors and the public sectors.

Over the years, I have assisted clients in resolving several high-profile tax disputes involving state and federal tax authorities. In addition, I have participated in several tax advisory assignments for local and international clients, tax trainings, workshop/seminar facilitation, etc. as a contributor to the tax environment.

Our firm SIAO PARTNERS is a Partnership of four reputable firms founded in 2005. SIAO is a firm with proven accounting, tax, and financial consulting experience steered by well-seasoned professionals that have the common goal and objective to offer superior professional accounting and management services. The four principal partners of SIAO, who are proven professionals are all fellows of the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Taxation of Nigeria (CITN) with a combined post qualification experience of over one hundred (100) years.

The quality of our firm’s performance is directly related to the skills of our professional staff and the direct involvement as well as supervision of client engagements by our Partners.  The amount of partner’s and staff involvement with our clients exceeds a wide margin degree of attention to similar client matters by the major accounting and human resource firms.  This direct contact offers our clients the ability to confer frequently with personnel having a broad base of business experience to call upon.  It is this involvement that enables us to contribute meaningfully to the identification and achievements of each client’s business objectives.

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