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I have observed that young and energetic LIRS agents abound in Lagos, they are everywhere! The distinctive black T-Shirts move around like so many predators stalking prey. The sight of them brings visions of black panthers to my mind, as they stealthily and surely implement the will of the Government. Their mandate is powered by the resolve of Uncle BRF as the enforcement units move accompanied by men of the Nigeria Police – Nothing stops them as they lock down large and small companies, follow up to arrest tax defaulters, evict management and staff of organizations and detain ‘troublesome’ dissidents.
Last year, the Lagos State Internal Revenue Service (LIRS) said it shut 546 companies over tax evasion between August 2009 and August 2010. The Head of the enforcement team, Mrs. Afolashade Afolayan, told the News Agency of Nigeria (NAN) that the companies defaulted in the remittance of over N5 billion as taxes. Afolayan said that the taxes included Personal Income Tax and Company Tax. “
In 2009, I witnessed an enforcement exercise carried out on a well known capital market operator and Issuing House (name withheld) on Adeola Odeku Street V/Island. It was a nasty sight, employees and visitors being bundled out of the building hurriedly, raised voices and managers detained for daring to exchange words with the young female LIRS agent.
Well those are big companies you may say but read on and you would realize that you and I (Individuals) are now prime targets of the government revenue drive.
Last month i.e. in March 2012, the Lagos State Government announced that it has received the approval of the Attorney-General of the Federation (AGF) and Minister of Justice, to prosecute more than 5 million tax evaders, failing to comply with the provisions of the 2011 Personal Income Tax Act (PITA).

WHAT LAGOS STATE GOVERNMENT HAS BEEN UP TO
The LIRS has improved the efficiency of its collection processes and extended the tax net so as to bring in more people who should be paying but were not.” To this end the LIRS has undergone restructuring to enhance its operational abilities. Some of these restructuring included the decentralization of operations and the establishment of four regional offices; expansion of Tax Education and Enlightenment Teams (TEET) and Mini Tax Offices across the State, bringing the number of mobile TEET teams to 57 from 45; re-launch of the High Net Worth Individual Department; establishment of six zones to cover hotels, entertainment centres and shopping malls; review of all self assessment forms submitted to LIRS to ensure adequacy of tax paid by those who filled self assessment forms; and expansion of field audit staff that go out with consultants to gather data.
HOW IT CONCERNS YOU
The predators, I would call them - the mobile TEET, have increased dramatically since 2010. There are more of them out there than before and their core target is you and me, individuals, workers, SME owners, entrepreneurs, traders, directors of organizations, every day people.
Their wounds come in form of obtaining your hard earned Naira and there is nothing you can do about it, you have to pay up when they come in, that is the law, deal with it.
You can get a small scratch and a big bite that hurts depending on your knowledge of and response to the taxation issues that confront you in this jungle called Nigeria. It is expedient to harness the services of a professional tax manager to exploit the country’s tax laws to your best advantage
LAGOS STATE IS DESPERATELY SEEKING ADDITIONAL REVENUE FROM TAXATION
Governor Fashola has described as totally unacceptable a situation in which people live on the taxes paid by the few, adding that the more people contribute to the common wealth, the better for everyone. According to him, only 2.5 million of the eight million Lagosians on paid employment pay their taxes into the government coffers in 2010 and he has mandated his Special Adviser on Taxation to do a final letter to defaulters under the Personal Income Taxation Act 2011

Friends do understand that this is not going to let up as States seek to reduce dependence on allocations from the Federation, Lagos is the trailblazer of this policy thrust with other states in the Country following suit. Lagos State’s dependence on federal allocation was 51.14 percent in 2007. In 2008, the rate dropped to 47.86 percent. In 2011, the rate dropped to 35 percent. This drop was because of the revenue collected through the state internal generated revenue (IGR) structure.
This sounds really nice especially if you are in Government, a public servant or public policy implementer or tax consultant. More money for development! More fees generated. Ok now! But it translates into less disposable income for the payers - that is the rest of us. In this time of petroleum deregulation, subsidy removal, Lekki Tolls, rising costs of virtually everything and a host of other TAXING issues – I advice you get a good tax manager or accountant (i.e. if you don’t have one already), who would help to minimize your exposure and manage your tax liabilities so that you do not pay beyond the legal minimum while taking advantage of rebates and benefits pertaining to compliance.

WHAT A GOOD TAX MANAGER SHOULD DO FOR YOU
1. Your tax manager should exploit Nigerian tax laws to your best advantage
2. The tax manager must provide you with relief from undue interruptions of normal business schedule and embarrassment from Tax Authorities and their agents by providing effective tax planning and management services
3. Your tax manager must do an in-depth review of the existing operational activities of your organization and install tax efficient procedures.
4. Your tax manager must prepare and render returns to the relevant tax authorities on your behalf.
5. The tax manager must handle all tax related correspondence/queries, obtain notices of assessment from State /Federal Inland Revenue, file objections where necessary and reach agreements with the Tax Authorities and obtain Tax Clearance Certificate.
6. Your accountant/ tax manager must explore alternative accounting methods for stock, depreciation etc with the aim of managing your tax liabilities
7. Your tax manager must help your company to obtain the “Acceptance Certificate” from the FIRS in order to enjoy generous tax rebate from the FIRS- the Acceptance Certificate and corresponding Assets Schedule (Certified) keeps your company in compliance with Federal tax laws and could be used as a vital document when the company has need for bank loans
8. The tax manager should be at hand in the registration of your company for Value Added Tax purpose and prepare and render monthly VAT returns on your behalf
9. Specific services in the areas of Pay-As-You-Earn (PAYE), Withholding Taxes (WHT) and other Government levies that your tax manager should provide include:
• Pre-Tax Audit Inspection – The tax manager should establish the tax liability of your company prior to the arrival of the Internal Revenue Staff for similar exercises. This is done with a view to ascertain how liability could be managed.
• Post-Tax Audit Review Exercise – This is carried out after the Tax Audit team of the Internal Revenue Service must have concluded their audit and issued statutory report to reflect the status of the company as regards tax liability. Don’t just accept whatever they tell you; get your tax manager to ascertain the reasonability and correctness of the liability so established and where necessary to contest the contents of the report with a view of resolving any area of disagreement.
• Installation of a Tax Efficient Salary Structure – Your tax manager should advise on various salary structures that can be adopted in order to take maximum advantage of the provisions of the law.
• Filing of Income declaration form and processing it with the Tax Authority.
• Monthly remittance of Pay-As-You Earn and Withholding Taxes.
• Obtaining Personal Income Tax Clearance Certificate for employees.
• Rendering of Year End Returns to the Tax Authorities as required by law.

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Shelze Consulting is a firm of chartered accountants, tax practitioners and management consultants. We have the requisite know-how to handle any tax issue complex of simple. From registration with tax authorities to contesting assessments raised by tax authorities against you.

Contact us:
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