oka4ugoo:
Tell ur friend to write to;

The Executive Director of the board of internal revenue,

The Secretary to the State Government

All the Honorable members representing his constituency both at the state and the national level

And state passionatly his plights and mishaps,

Attach all the relevant documents to the letter esp.

The loan agreement if any

The tenancy agreement he signed with his landlord which shows when he commenced his business.

Believe me it has worked for me

It really is annoying that people do not do what you've proposed here. Its like its too much work, and many will pay a bribe instead of doing this work without realising you pay once you will forever keep paying because the collectors will keep returning, when the truth is this is what should be done to change the system and make it work since a lot of these collectors were not sent by their boss and have no plan to pay the money they collect from you to the government on who's behalf they are telling you they are collecting it.

I said it here. We all need to become responsible for standing up for what is right and proper instead of irresponsibly blaming Buhari or government or Desmond Eliot whoever the fuq that might be!

They are playing on ur friend's ignorance. For you to succeed in Nigeria as a business man, u must be fearless and educate yourself on what is obtainable in your kind of business. Firstly, the 200k is illegal, how did they come about it. I see this thing as a setup from an enemy or a competitor around.
So my advice is for him to break the padlock and resume his business or pack his belongings and relocate to another place for his biz

jaxxy:


It’s either Lagos state government is mad or ur frnd is just being extorted because he’s seen to be new and naive. What sales did he make that they are taxing even during the lockdown when government is supposed to cushion the effects of the pandemic for atleast the the next 6 months after the lockdown was lifted.

Sadly in the country we have draconian laws set up by a highly irresponsible government and citizens who don’t even know their rights.

He should get a tax lawyer.

Na Chevron em be?
Person say e no dey fit go house again for day time cos e dey owe 3 months rent,you dey suggest tax lawyer like say na NGO.
A lot of you people are out of touch with reality and outright stupid most times.
What he should be doing is educating himself very well on how tax on that his kind of business works to the letter and then bouncing to the tax office armed with so much info to wrestle it out with them and correct his tax books.
Like say na with sand them go use get tax lawyer smh

cybertron88:

As I never marry nko? Dont understand d delivery aspect. Make I go drive Keke?? Plus what happens to buyers who need water from 8am?

Or those who needs in weekdays, don’t mind that guy jor

All the brother need is 100 people from nairaland to give him 1000 naira each and the problem is solve. Let me know how I can contribute my own

Nigeria will always come up with policies to frustrate one out of business.
Nigeria is always killing people's dreams.
A country where politicians are richer than business people, Nigeria

PROPHETmichael:
All the brother need is 100 people from nairaland to give him 1000 naira each and the problem is solve. Let me know how I can contribute my own

This could be the OP.
No giveaway will happen here,if anybody tries it I will make sure they close this thread.
UDUj seem you were right after all.

SeaTrade:
Na Chevron em be?
Person say e no dey fit go house again for day time cos e dey owe 3 months rent,you dey suggest tax lawyer like say na NGO.
A lot of you people are out of touch with reality and outright stupid most times.
What he should be doing is educating himself very well on how tax on that his kind of business works to the letter and then bouncing to the tax office armed with so much info to wrestle it out with them and correct his tax books.
Like say na with sand them go use get tax lawyer smh

Not to employ his services bt to guide him on what to do. He may even have benefits to claim from government in tax reduction or even bail outs. He can’t read everything there is to get the needed information.

He needs to settle with his landlord and get his shop back open or get another shop even if he has to borrow or seek help from family and friends so he can start earning again.

The system in this country is ridiculous and toxic.

jaxxy:


Not to employ his services bt to guide him on what to do. He may even have benefits to claim from government in tax reduction or even bail outs. He can’t read everything there is to get the needed information.

He needs to settle with his landlord and get his shop back open or get another shop even if he has to borrow or seek help from family and friends so he can start earning again.

The system in this country is ridiculous and toxic.

In essence the lawyer will guide him for free?

SeaTrade:
In essence the lawyer will guide him for free?

Atleast tell him how to go about his predicament. He doesn’t have to handle it for him. What is there in a 20mins discussion when the lawyer is free. Mind u there are so many young lawyers looking for cases and experience being paid peanuts till they build their profile. I know a bunch of frnds that are lawyers from school days.

FarahAideed:
Any tax not based on your profit is not a tax but extortion ...How did they arrive at 200k ? What state is this ?

Nothing is done in this country the normal way

cybertron88:
Where are the entrepreneur crew? Start ur own business, be ur own boss, quit ur 8-5 job. If u follow this ppl mouth u go enter bush. The lifespan of startup in this country is 2yrs I think it should be less than 9months now as the economy is on a downward spin. Naso I invest heavily to setup a pure water factory after all the feasibility studies and revenue projection. My factory didn't even make it past 6 months. From fraudulent Keke boys and staff to extortion from State revenue collection, landlord come add him own join. If not I still had my 8-5 job I no know wetin I for dey do now.
The best business in this country is one that I can do online from the comfort of ur bedroom. Anyone involving a brick and mortar structure needs God's grace to survive.

In most businesses, the staff are the drain. Fraudulent staff, even without the extortioners, will always run down any business left to them. Greed, they want to get rich quick, and as usual, want to use someone else to get there. Later it will be done to them and they will complain about the economy.

No matter how you factor in profit in your business, unless you're doing it yourself, your staff must cheat you. Some will be honest until they begin to feel you're enjoying too much.

One can understand why Dangote employs Indians.

cybertron88:
Where are the entrepreneur crew? Start ur own business, be ur own boss, quit ur 8-5 job. If u follow this ppl mouth u go enter bush. The lifespan of startup in this country is 2yrs I think it should be less than 9months now as the economy is on a downward spin. Naso I invest heavily to setup a pure water factory after all the feasibility studies and revenue projection. My factory didn't even make it past 6 months. From fraudulent Keke boys and staff to extortion from State revenue collection, landlord come add him own join. If not I still had my 8-5 job I no know wetin I for dey do now.
The best business in this country is one that I can do online from the comfort of ur bedroom. Anyone involving a brick and mortar structure needs God's grace to survive.

Exactly. Na only north u fit tell person that thing en go work, bcus house rent, n tax are low, buy in south n Oyo is it own

NazareneMonk:
This story might be a little lengthy. My friend graduated from school and unfortunately for him just like many graduates, he could not get a job.

He later met a woman who helped him secure a loan from her meeting and he used this loan to secure a shop in front of his house where he will be using as a bar, to save up money to setup his own fish farm which was his major area of specialization as a graduate of Agric.

In all of this,my friend did not see the future as his business barely started when the nation wide lockdown was declared with gatherings restricted.

Sales was no more coming, a loan had to be paid, and in the whole of this,several government officials came under different umbrellas and ministries to collect tax. Right after this,the ENDSARS protest started and things went from bad to worst due to the post-protest anarchy as his store had a fair share of the looting.

My friend is not easily broken,he was determined and so he sold his only working fridge to restock what he lost and had to get a cooler where he buys ice blocks daily to cool his drinks.

In all of this,the huge taxes keeps coming,he always explained to them how sales are and in some case he is asked to pay their transport back,depending on the ministry that came.

To cut the story short,his shop was locked up yesterday for a tax worth 200k+ by the board of internal revenue, he went to their office for rectification but the lady there told him to deposit 100k first before they can talk.

My friend felt like collapsing because a few weeks ago he deposited 3k into that account and they mocked him saying the money is too small not considering if he makes sales that much.

The problem now is my friends landlord told him to quit the shop and house and he is planning to close the business but does not know what to do.

Any idea will be appreciated.

Yout story seems not to be true .
No tax authority in Nigeria charges two hundred thousand naira per annum as personal income tax.
Which state is this please ?

UDUJ:


I don't think the op is genuine. If it's really true and it's in Benin city I might be able to tell some of my people based in Benin to assist him at the tax office free of charge, but it looks like a scam to me. Anyway I am waiting for him to reply me.

SeaTrade:
This could be the OP.
No giveaway will happen here,if anybody tries it I will make sure they close this thread.
UDUj seem you were right after all.

Nairaland detectives spotted. Kudos to you. Abeg, me I'm very genuine, pls help my life. I Will appreciate any amount sirs

cybertron88:
Where are the entrepreneur crew? Start ur own business, be ur own boss, quit ur 8-5 job. If u follow this ppl mouth u go enter bush. The lifespan of startup in this country is 2yrs I think it should be less than 9months now as the economy is on a downward spin. Naso I invest heavily to setup a pure water factory after all the feasibility studies and revenue projection. My factory didn't even make it past 6 months. From fraudulent Keke boys and staff to extortion from State revenue collection, landlord come add him own join. If not I still had my 8-5 job I no know wetin I for dey do now.
The best business in this country is one that I can do online from the comfort of ur bedroom. Anyone involving a brick and mortar structure needs God's grace to survive.

God bless you for sharing this. Advise your friend to create free accounts on freelancing job sites and make his cool money. Opening shops here and there no be way for now.

Meanwhile, I need support of everyone to grow my channel (url in my signature). Kindly watch, subscribe, comment and share with your friends. Merci!

SeaTrade:
Consumer tax is what is known as VAT,
And businesses with an annual turnover less than 25million is clearly exempted from that rubbish.
Educate yourself very well young man so that people wouldn't cash out on your ignorance.
Any small thing Nigerians don dey beg and acting naive ,
Na wa!

why should a sole proprietor pay for consumer tax, he is just a small business owner isn't it limited manufacturing companies that pay for consumer tax, this is pure extortion and not tax, how can the manufacturer pay for consumer tax and a sole proprietor pay for same tax, and i thought tax are calculated based on accrued profits and not total sales na, which kind wahala is all this.

Hmmm...... I understand all your friend is going through... but just can't understand why he didn't start up the fish farm with the money he borrowed. .... borrowing money to start a business he knows nothing about .... to raise money to start a business he knows much about. This one is a riddle.... have the answer?

Bouz:
why should a sole proprietor pay for consumer tax, he is just a small business owner isn't it limited manufacturing companies that pay for consumer tax, this is pure extortion and not tax, how can the manufacturer pay for consumer tax and a sole proprietor pay for same tax, and i thought tax are calculated based on accrued profits and not total sales na, which kind wahala is all this.

From the bolded, it's obvious you understand the Nigerian tax law to some extent.
Please bro, read the original story again, and this time read it carefully.
The OP's story does not add up.
. . . for starters, an expert in fisheries got a loan and instead of at least starting a small fish farm, he decided to start a beer parlour.
Secondly, have you heard of a small shop owner in Nigeria paying a tax of 200,000naira per annum ?
It's either the friend/OP is ignorant or the OP is a bloody liar. (Even the OP's Nairaland account is less than 24 hours old)

NazareneMonk:
This story might be a little lengthy. My friend graduated from school and unfortunately for him just like many graduates, he could not get a job.

He later met a woman who helped him secure a loan from her meeting and he used this loan to secure a shop in front of his house where he will be using as a bar, to save up money to setup his own fish farm which was his major area of specialization as a graduate of Agric.

In all of this,my friend did not see the future as his business barely started when the nation wide lockdown was declared with gatherings restricted.

Sales was no more coming, a loan had to be paid, and in the whole of this,several government officials came under different umbrellas and ministries to collect tax. Right after this,the ENDSARS protest started and things went from bad to worst due to the post-protest anarchy as his store had a fair share of the looting.

My friend is not easily broken,he was determined and so he sold his only working fridge to restock what he lost and had to get a cooler where he buys ice blocks daily to cool his drinks.

In all of this,the huge taxes keeps coming,he always explained to them how sales are and in some case he is asked to pay their transport back,depending on the ministry that came.

To cut the story short,his shop was locked up yesterday for a tax worth 200k+ by the board of internal revenue, he went to their office for rectification but the lady there told him to deposit 100k first before they can talk.

My friend felt like collapsing because a few weeks ago he deposited 3k into that account and they mocked him saying the money is too small not considering if he makes sales that much.

The problem now is my friends landlord told him to quit the shop and house and he is planning to close the business but does not know what to do.

Any idea will be appreciated.

Honestly, these charges are arbitrary,

For ease of doing business in Nigeria, SmEs below a certain threshold of turnover are exempted from tax payment,

My advise is that he should get a registered chartered accountant to help him with the business statement of comprehensive income and loss, then he can approach the state board of internal revenue to know how much he is to pay( if any base on his monthly/annual turnover) viz a viz profit made,

BTW, my Edo brothers who are these tax collectors, what are you people wating for; go and collect tax from fulani herdsmen terrorising your metropolis with cow poos and the like because they are into their private businesses as well

In a sane climate, tax is based on income. From your write up, is this man making income that warrants payment of such huge tax, no is the answer. Our problem is that issue of TARGET.

Tell him to go to agriculture with serious prayers

Dear NazareneMonk,

I am sorry about your friends situation. As someone who has knowledge of Nigerian tax systems and works with states board of internal revenue in implementing tax solutions, I will try to explain your friends obligation to states tax wise.

Aside other levies, depending on what your friend registered his business as, his tax goes to either state or federal government. i.e. if your friend registered his business in CAC as a company and not a business name, his company tax goes to FG via FIRS, but if he incorporated his business with CAC as a business name, he is liable to pay tax to states. If the said business is not registered at all, he remains an individual who pays tax to State board of internal revenue.

Regardless of any of the above, consumption tax is a tax on individual. Hotels, motels, event centers, bars, etc. pay consumption tax on anything and everything sold therein. The taxes and levies Act (2015) empowers states to charge 5% on people when they spend money in the above listed lines of business. So the tax is charged on individuals consuming services on your friends or your business. Let me break it down.

If for example your friend:
1. Sell 20 Cartons/crates of 33 worth 50k in a month, his consumption tax on 33 = N2500
2. Sell 35 Cartons/crates of Hero worth 70k in a month, his consumption tax on Hero = N3500
...
3. Sell Peppersoup/food/anything eatable worth 100k in a month, his tax on food = N5000

Total of consumption tax for that month on those activities are = N11,000.
If he hasn't paid for a year, this is N11k x 12 = N132,000 plus accrued fine for defaulting.

This is possibly what those from board of internal revenue did before giving him his bill. If they didn't do the above, he should get his books and account statements ready and take it to them.


Aside the above, states are trying to increase their revenues. They don't tax individuals directly except on lands, but business like this get taxed. I often tell my colleagues in the field to go to big businesses or established businesses and leave start ups like your friends business. For instance, the tax we collect for FG, we don't visit little companies but companies handling contracts for FG and we do this mostly via MDAs where the accountant general of the federal has issued a memo mandating MDAs to deduct all taxes at source before paying them their profit.

Your friend's business as an entity is also obligated to pay income tax depending on how it's incorporated in CAC. So if he's not registered as a company (RC), he should have no business with anyone from FIRS. If he receives such people let him know they are fraudulent or don't understand Nigerian tax jurisdictions. The entity/company income tax (company here can be Business Name, registered company or incorporated trustee, BN, RC, IT respectively, the last (IT) does not pay tax) now depends on his income and expenditure.

Aside the above tax, only people from local government can request for him to pay other levies like shop registration or fee, which shouldn't be much.

This is my view about your friend's situation. States are broke and some of these tax enforcers are given targets to meet. So they go to little businesses like this.

tobatele:
In a sane climate, tax is based on income. From your write up, is this man making income that warrants payment of such huge tax, no is the answer. Our problem is that issue of TARGET.

I don't understand what you mean by sane climate?

They are different tax and tax laws. Nigerian tax is even one of the cheapest. Regardless, he's liable to pay for some tax depending on what he does. I often advise businesses to know the necessary taxes they are liable to to forestall government clampdown on them.
When you see Lagos topping in revenue generation, how do you think they earn it? It's tax.

If the said business is properly registered, he can file for minimum tax if he's not making profits or go get tax exempts.
States are all out. I have been to lots of states in this regards and all states are out for it.

The problem here is that there are some business that should be allowed to grow. You can't even say if the guy is doing well but refused to pay tax and when they came for him, he took the side of emotions and pity.

SeaTrade:
Consumer tax is what is known as VAT,
And businesses with an annual turnover less than 25million is clearly exempted from that rubbish.
Educate yourself very well young man so that people wouldn't cash out on your ignorance.
Any small thing Nigerians don dey beg and acting naive ,
Na wa!

Consumption tax is different from Valued added tax.

For simplicity sake, I will make it simple. VAT is added to goods and is paid bottom up. The producers add VAT amount on the prices. Most on alots of goods save raw materials.

Consumption tax is a tax on individuals on consumption of goods and services on certain places like hotels, restaurants, event centers, etc. It's previously called Hotel and Restaurant Consumption tax. Because it's charged on businesses like this. The Act and Levies Act recognises it and gives states the competence to collect this regardless of how your business is incorporated.

The High court in Lagos upheld the states Hotel occupancy and restuarant consumption tax and this was even prior to 2015 before the taxes and levies act was amended to effectively collect it. This is the case of Lagos State Attorney General vs Registered Trustee and hotel owners.

Ogun state lost their case in Ogun state vs Nigerian bottling company because, the court held that the said tax was on the company selling beers not on individual consuming same. Lol.

Bouz:
why should a sole proprietor pay for consumer tax, he is just a small business owner isn't it limited manufacturing companies that pay for consumer tax, this is pure extortion and not tax, how can the manufacturer pay for consumer tax and a sole proprietor pay for same tax, and i thought tax are calculated based on accrued profits and not total sales na, which kind wahala is all this.

Read my previous responses bro. The guy is liable to the above taxes.

Most of these businesses evade tax even when they make profit. For his tax to get up to 200k, you should know he's making profit (well, I don't know shaaa). But when tax enforcers clamps on them, they seek for stories like this.

If truly he's not making profit, then the blame is on the field agents. Normally, they are told to avoid little businesses so as not to kill it. But if you are making gains, the state would want to benefit from it.

For instance when you buy a land and want to register same, the taxes and fees you are supposed to pay is beyond you. It's very big. Lots of them on those legal documents. But I tell my colleagues to only request for Stamp duty on Power of Attorney, Deed of Sale and nothing more. Otherwise, it will be too much.

Esseite:
Businesses persons should always form a habit of checking their business feasibility on a 3/6 month basis.. it would guide you on if to forge ahead, re-capitalize or abandon while having some tangible left overs to pick yourself up... a lot whom touched the ground on being excessively optimistic, never left the ground.

/
Many businesses in developed countries went under. The reason that people there are hanging on is because their governments pay them biweekly stipends to stay afloat.
Compare that to Nigeria. No government support. Covid lockdown happened. EndSARS happened. To add salt to injury, government extortionists are on the prowl. And the best you can think is lecture the man on business. No new business would have withstood the double whammies any way. Let's be realistic.
/

InvertedHammer:

/
Many businesses in developed countries went under. The reason that people there are hanging on is because their governments pay them biweekly stipends to stay afloat.
Compare that to Nigeria. No government support. Covid lockdown happened. EndSARS happened. To add salt to injury, government extortionists are on the prowl. And the best you can think is lecture the man on business. No new business would have withstood the double whammies any way. Let's be realistic.
/

I gave up on a business that would have tanked me in same pandemic, it was hard but I had to tell my self the truth only because I decided to evaluate... my saving grace was the sell off I did that raised tangible capital, I could have plunged that back in a dying horse.. my advice was not to castigate him, but was to let others know aswell.

cybertron88:
Where are the entrepreneur crew? Start ur own business, be ur own boss, quit ur 8-5 job. If u follow this ppl mouth u go enter bush. The lifespan of startup in this country is 2yrs I think it should be less than 9months now as the economy is on a downward spin . Naso I invest heavily to setup a pure water factory after all the feasibility studies and revenue projection. My factory didn't even make it past 6 months. From fraudulent Keke boys and staff to extortion from State revenue collection, landlord come add him own join. If not I still had my 8-5 job I no know wetin I for dey do now.
The best business in this country is one that I can do online from the comfort of ur bedroom. Anyone involving a brick and mortar structure needs God's grace to survive.

That means we that just made it pass 3 years should thank God. It is not easy though.

Ndipe:
So, small businesses are also taxed in Nigeria, I am surprised.

That's the handwork of the extortionists. I know that shops are to pay annual rates which shouldn't be more than 5k to local government and the collection is not even constant, that's all.

Joysticks:
They are extortionists not tax collectors.Na so them dey do for Lagos.If you no wise up you go use your profit pay them and them go still dey come until your business go collapse .

That's because they don't know the negative implications of their action on the entrepreneurs, their families and the unemployment they are creating in the country. Selfish and ignorant people.

walexsho:

Those in pure water business do the delivery themselve. You can choose to deliver on weekend, 4pm to 7pm or let your wife manage the business for you.

cybertron88:

As I never marry nko? Dont understand d delivery aspect. Make I go drive Keke?? Plus what happens to buyers who need water from 8am?

CheedyJ:

Or those who needs in weekdays, don’t mind that guy jor

His advice about changing pattern and method is solid. Someone needs your product by 8am on Friday but you had already supplied her ahead by 6pm Thursday.
If you don't have a wife, then get someone you trust, that shouldn't be too hard. And you don't need to drive yourself, just dedicate few hours to monitor the operation.

And I guess you didn't see the part of his comment which says evening doesn't include weekdays? Many pure water retailers don't buy more than two times in a week.