The Federal Inland Revenue Service (FIRS), took to the social media its official social media page, have revealed important Tax filling due dates every Nigerian must work with in May 2024.
According to the Tax Umpire, the dates are; 10th of May,2024, Due date for remitting Pay As You Earn (PAYE), 21st of May,2024, Due date for Value Added Tax (VAT) and Withholding Tax (WHT) return respectively.
According to investopedia, Pay As You Earn (PAYE), refers to either a system of income tax withholding by employers or income-based system for student loan repayments.
In the context of taxes, Pay As You Earn, requires employers to deduct income tax-and in some cases the employee portion of social insurance benefit taxes form each paycheck delivered to employees as form of advance payment on tax due.
Meanwhile, the standard VAT rate is 7.5% (increased from 5% on 1 February 2020) and Zero-rated items include goods and services purchased by diplomats and goods purchased for use in humanitarian donor-funded projects.
Exempt items include plants and machinery for use in export processing zones (EPZs) or free trade zones (FTZs), basic food items (based on a specific list), medical products and services, pharmaceutical products, books and educational materials, and exported services.
In Nigeria, Companies such as; MTN, Airtel, government agencies, banks, and oil and gas companies are required to deduct at source VAT charged by their suppliers and remit it to the tax authority.
All other organizations are required to collect VAT charged on their invoices from their customers for filing and payment to the tax authority.
The Finance Act 2019, has introduced a reverse-charge mechanism for services from which no tax invoice was received. VAT returns are filed on a cash basis.
The FIRS has implemented a platform for auto tracking and remittance of VAT known as FIRS VAT-Collect. Some of the users of the system are domestic airlines (for instant remittance of VAT on their ticket sales) and other retailers.
Non-resident digital companies (as appointed by the tax authorities) rendering services to Nigerian customers are required to charge, collect VAT, and remit to the FIRS in the currency of transaction.
FIRS, also noted that 31st of May, 2024, is the Due date for companies income Tax (CIT), for October 2023 accounting year end, Tertiary Education Tax (TET) & National information Technology Development Levy (NITDL).
In Nigeria, the CIT rate is 30% for large companies (i.e. companies with gross turnover greater than 100 million Nigerian naira [NGN]), assessed on a preceding year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).
Investment income paid by a Nigerian resident to a non-resident is sourced in Nigeria and subject to withholding tax (WHT) at source, which serves as the final tax.
In respect of business profits, a non-resident company (which is not tax resident in a treaty country) that has a fixed base or a permanent establishment (PE), in Nigeria is taxable on the profits attributable to that fixed base. Non-resident digital companies (which are not tax resident in a treaty country) that have a significant economic presence (SEP) will be subject to income tax in Nigeria on profit attributable to the taxable presence in Nigeria.
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