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Re: Tax Professionals Forum by omogidi234(m): 4:29pm On Mar 07, 2013 |
Nice thread. Thanks to all. |
Re: Tax Professionals Forum by Fixed: 5:56pm On Mar 07, 2013 |
Hi Jarus, A friend has an issue at hand as we speak. Your urgent advice will be appreciated. My friend is into frozen foods business of which year 2012 turnover is about Eight Million naira. Though the business is registered as an enterprise (not a company), he uses his personal account for business transactions as he is yet to open an accountfor the business. Actually, the business name registration was done not too long ago. Three weeks ago, he received a letter from FIRS to pay the sum of N75 Million being the accumulated tax covering a period that the business had not even been thought of. Mind you the letter was addressed to the actual business name which had just been registered. Now the man in charge of the tax office that sent the letter had persistently called my friend to come and 'settle the matter' with the sum of N60,000 like others did and there was no receipt issued whatsoever for the payment. My Questions: 1. How is tax calculated for businesses that are registered as an enterprise? Please bear in mind that the books of account are largely informal where they exist at all. They had actually requested in the letter that statements of accounts and other records be brought for correct calculation of tax arrears 2. Are sales of fish and other frozen food items taxable? Don't they come nder basic food items or Agric items which are exempted according to your earlier post? 3. Is it wise to report this station manager to his superior for fraudulent conversion of remittances in the name of 'settlement'? 4. Generally, how doyou think the issue should be approached? My friend had just received another letter stating that his business will be shutdown and the process of winding down would commence if a response is not received in 7 days! Thanks bro. 2 Likes 1 Share |
Re: Tax Professionals Forum by Jarus(m): 7:17pm On Mar 07, 2013 |
@ Fixed We want better Nigeria, so the settlement option, first and foremost, should be discarded. He may end up paying more than 60,000 through official channel, but it is better to be more honourable. There are some things that are not clear here. What type or types of tax is being assessed according to the letter? Is it income tax or VAT? If it is income tax, is the business located in FCT? Otherwise, FIRS has no business taxing an enterprise's income. Their jurisdiction is only incorporated entities. State government of the site of the business is responsible for the collection of income tax of individuals, partnerships and enterprises. If it is VAT, then it is FIRS' jurisdiction. In any case, N70m is absolutely ridiculous for an entity that earns N8m as turnover. But since your friend's books are not assessible to them, they must have used deemed (guessed) turnover. With a turnover of N8m, worst case scenario is a VAT of 5% on turnover, which comes to N400,000. There are many issues associated with it, but obviously, someone just wanted to pull a fast one on you. Don't report to higher authorities yet, call the guy on phone and tell him that you have handed it over to your lawyer to look into the issue. He will be scared. Although it is highly unlikely that they come to shut down your business (in any case, no distrain can be carried out without court order), just to cover yourself you can also write to FIRS, attentioning Head of VAT (if it is VAT), seeking for more time to gather your records together and telling them the assessment covered period that pre-dated your business. But obviously, from the situation, one hungry FIRS officer is just trying to milk you, even though you also have taxes to pay (which may even be higher than the tip he is asking for). 9 Likes 2 Shares |
Re: Tax Professionals Forum by Eazeee(m): 8:00pm On Mar 07, 2013 |
Death & Tax are inevitable. Stop paying bribe because they still must come 2 pas 2 Likes 1 Share |
Re: Tax Professionals Forum by Nobody: 2:32am On Mar 08, 2013 |
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Re: Tax Professionals Forum by Nobody: 2:54am On Mar 08, 2013 |
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Re: Tax Professionals Forum by Malubi(m): 6:00am On Mar 08, 2013 |
crownboss: @Jarus and AqvaPAYE is charged only on your basic salary using a certain pecentage i.e. In government mostly is 2% of the basic, I dont know of private organisations. Thanks 1 Like |
Re: Tax Professionals Forum by Malubi(m): 6:01am On Mar 08, 2013 |
crownboss: @Jarus and Aqva |
Re: Tax Professionals Forum by Malubi(m): 6:31am On Mar 08, 2013 |
Fixed: Hi Jarus, A friend has an issue at hand as we speak. Your urgent advice will be appreciated.MY OPINION :: 1. Write the firs to give you time to arrange your neccesary books and records to enable you settle them better. 2. You need to employ an Accountant who will arrange everything for you. Pls inform me if you need the services of Accountant, otherwise they want to bring problem for you and even stop your company from Operation. |
Re: Tax Professionals Forum by teexzle: 7:44am On Mar 08, 2013 |
U missed out National housing fund relief Jarus: 1 Like |
Re: Tax Professionals Forum by Jarus(m): 8:50am On Mar 08, 2013 |
Malubi: PAYE is charged only on your basic salary using a certain pecentage i.e. In government mostly is 2% of the basic, I dont know of private organisations. ThanksBros, na wa o. 1 Like |
Re: Tax Professionals Forum by Nobody: 9:20am On Mar 08, 2013 |
@Jarus don't you think the guy should first write a letter to the board in charge of hearing tax issues to appeal against his assessment. I think there is a provision in the FIRS Act that deals with assessment appeals where the tax payer feels his assessment is incorrect or exorbitant. |
Re: Tax Professionals Forum by Jarus(m): 10:55am On Mar 08, 2013 |
poshdiva: @Jarus don't you think the guy should first write a letter to the board in charge of hearing tax issues to appeal against his assessment. I think there is a provision in the FIRS Act that deals with assessment appeals where the tax payer feels his assessment is incorrect or exorbitant.Yeah, but that's too far/early at this stage in my opinion. You appeal after you reach a deadlock. He hasn't even had any meeting the officers. |
Re: Tax Professionals Forum by taxation: 2:37pm On Mar 08, 2013 |
Aqva: @ fixed you are right. They might have used the compounded formula. |
Re: Tax Professionals Forum by demmix(m): 7:11pm On Mar 08, 2013 |
Jarus: He should write to them immediately contesting the assessment as any assessment notice is deemed to be final and conclusive if it is not contested within 30 days of the receipt of such notice. After then, his appeal is baseless. If he has just registered his coy, he needs to prove it with his certificate of incorporation or any evidence that can show that he just started operations such as rent agreement. Moreover, he needs to clarify if they're asking him for his VAT returns as the letter would clearly spell it out. |
Re: Tax Professionals Forum by Jarus(m): 7:36pm On Mar 08, 2013 |
demmix:That's what I told him. He should write objection letter to FIRS. The appeal poshdiva mentioned was filing an appeal before the TAT. |
Re: Tax Professionals Forum by folu500(m): 12:57pm On Mar 09, 2013 |
Pls house can anyone enlighten me on the process of filling and recovering losses incured in previous years. Am talking of a financial advisory firm. |
Re: Tax Professionals Forum by labiola: 11:18pm On Mar 09, 2013 |
@ fixed, The letter from FIRS might not really from their office, for the tax guy to be calling your friend there is more to it. My opinion is this, write a letter to then and contest that figure, pls do that through a tax expert. Pls don't give anyone bribe pls, we need to start discouraging that. Also, tell your friend to prepare a management account that will show the true position of his business, moreover fish is part of food and its excluded from VAT. NB: we need to be careful not to give wrong information on this forum, if you don't no something pls keep mute let the people that have the knowledge speak. How could someone say you can only pay paye on your basic salary, I disagree with the person. You pay paye on all income that comes to you even income from other business apart from your salary. 4 Likes |
Re: Tax Professionals Forum by kaz4sure: 8:25am On Mar 10, 2013 |
Fixed: Hi Jarus, A friend has an issue at hand as we speak. Your urgent advice will be appreciated. I'm 90percent sure that the letter is not from FIRS, it is from dos fruadulent people in FIRS that want to milk the coy, what is the correlation between 75m and 600k, men!! Let's wake up cos dis is a clear case of fraud and forgery of letter... please kindly forward a scanned copy of the letter and phone contact of the staff involved to kaz4sure@yahoo.com for further action, we need to clean up this country Let me now address the issue as a tax consultant, FIRS dosent ve any write to impose CIT(coy income tax) on enterprise or biz name, they are classfiy as unincorporated entites, CIT is applicable to PLC and LTD, but VAT is applicable to all.....the fish business in this case is no more a basic food item because it has been further processed and value has been added to it, my advice for the coy is to prove the actual turnover for the year and submit the same to fIRS who will charge VAT @5percent on the turnover and the same coy is also encourage to remit PAYE and other state levy to the state internal revenue service.. |
Re: Tax Professionals Forum by teexzle: 9:00pm On Mar 11, 2013 |
Hello every1, @jarus please I need a lil help here, I undastand one has to file a statement of affairs for a newly registered company, pls can u help with how one looks like and other procedures to gettn it done, the coy has not statd biz bt it will attain 18mths of incorporation by march 14..so ths is very urgent pls |
Re: Tax Professionals Forum by Jarus(m): 9:20pm On Mar 11, 2013 |
teexzle: Hello every1, Only a professional accountant can prepare one for you. But to cover your track before deadline, write a letter for FIRS, that you are currently preparing your statements of affairs, that you will forward to them when ready. |
Re: Tax Professionals Forum by folu500(m): 7:12pm On Mar 12, 2013 |
folu500: Pls house can anyone enlighten me on the process of filling and recovering losses incured in previous years. Am talking of a financial advisory firm. no one has given any opinion/answer on d above question. Am still waiting |
Re: Tax Professionals Forum by nitrogen(m): 8:04pm On Mar 12, 2013 |
folu500: Pls house can anyone enlighten me on the process of filling and recovering losses incured in previous years. Am talking of a financial advisory firm. Dear Folu500, Your question is not that clear, is it that you want to recover or relief your previous years losses so your tax liability is reduced? If it is the latter, then it is set off against your adjusted profit, (before deducting capital allowance- which is limited to two-third of the assessable profit),meanwhile, your loss can only be carried forward for four years. NB: Losses brought forward can only be set-off against income from the same source from which the loss was incurred originally. I hope this settles it, if not, then you need to be more elaborate. Thanks. |
Re: Tax Professionals Forum by teexzle: 8:38pm On Mar 12, 2013 |
Ok thanks,can u do this for me, I undastand preparn a statement of affairs doesn't take time. Jarus: |
Re: Tax Professionals Forum by Jarus(m): 8:48pm On Mar 12, 2013 |
teexzle: Ok thanks,can u do this for me, I undastand preparn a statement of affairs doesn't take time.Hit me an sms |
Re: Tax Professionals Forum by folu500(m): 10:14pm On Mar 12, 2013 |
nitrogen: its loss relief. Thanks for your response i very much appreciate it. |
Re: Tax Professionals Forum by labiola: 12:57pm On Mar 13, 2013 |
@Teexzle, I can help you to prepare one, you can send me a mail on labiola@yahoo.com. It will cost you token. |
Re: Tax Professionals Forum by Melahou(m): 1:35pm On Mar 20, 2013 |
Jarus: I work as Tax Accountant in a company in Lagos.please whats the simple format or a template for calculating VAT and WITHHOLDING TAX |
Re: Tax Professionals Forum by teexzle: 1:22pm On Mar 23, 2013 |
Hi every1, I decided to prepare an account that suites d coy in ?, bt I will b needing an auditors stamp and report so as to submit to firs..send me a pm if u can assist pls |
Re: Tax Professionals Forum by thirty(m): 3:23pm On Mar 24, 2013 |
Aqva: Tax is a complex profession, it's difficult to knw it all with all the CIT, VAT, WHT laws which are complex. For the records, accounting is not taxation, I disagree that having ACA means u have knwn Abt taxation, an accountant knws very little indeed. Tax profession is not complex. Its as simple as the way students pass it in professional exam. If you can follow the procedure, policies and principles (rules) you will scale thruogh. But the tax authorities are making things difficult. That is why companies go for tax consultant like We. Not that we know all but we bargain for the best of judgement with the authority, like the lawyers. |
Re: Tax Professionals Forum by Jarus(m): 6:37pm On Mar 24, 2013 |
Melahou: It is about knowing the principle, not the format. |
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