Anxiety as FG prepares to enforce tax laws on CSOs, others
The federal government has stated that civil society organizations (CSOs), including non-governmental organizations (NGOs), cooperative societies and other eligible businesses, have a responsibility under tax laws to meet their financial obligations, whatever the nature of their operations.
The Federal Inland Revenue Service (FIRS) said this during a webinar it hosted with the Joint Tax Board (JTB) program and the European Union, agents managed by the British Council for Citizen Transformation (EU- ACT).
FIRS Executive Chairman Muhammad Nami, represented by the organization’s compliance support group coordinating director Dick Irri, said they will continue to partner with stakeholders, such as the co-organizers. of the program, in their desire to help raise awareness among taxpayers of their responsibilities.
He said civil society organizations and other like-minded people were responsible for filing income tax returns and an inventory, and that tax authorities would demand payment of taxes from them and d ‘others in return, only when they engage in businesses and make a profit.
FIRS Tax Policy and Advisory Department Director Temitayo Orebajo, in his presentation on the tax liability of CSOs and non-governmental organizations, refuted claims by some that civil society organizations do not had no tax liability.
“There is a penalty for CSOs and others involved, for not filing; and there is a late filing penalty. Whether you (CSO) have something to do or not, you have a responsibility to file. After one year, you are registered. In order not to break the law, you must go and file, at least your inventory. It can be a one-page document, ”Orebajo said.
He said that NGOs and CSOs include organizations, institutions and businesses engaged in ecclesiastical, charitable, benevolent, literary, scientific, social, cultural, sports or educational activities of a public nature.
“All CSOs must register for tax purposes and obtain a Tax Identification Number (TIN). The following documents are required for tax registration: A copy of the registration certificate issued by the Commission des Affaires Sociales (CAC) or any other registration document; certified copy of memorandum and statutes, constitution or rules and regulations governing CSOs; list and profiles of appointed directors / board members, and other relevant documents, ”he said.
Another panelist and deputy director of the Department of Tax Policy and Advice, Olatunji Olabode, said CSOs and others should file returns and pay taxes (if applicable) to MTOs close to them or use the TaxPro Max solution.
“CITA Section 55 (1) requires every business in Nigeria, including CSOs, to file annual tax returns. A tax return includes an audited account, calculations of taxes and depreciation allowances and a true and correct written statement, containing the amounts of its surplus from each calculated source; a completed self-assessment form; the indications, which may be required in the form regarding the required profits, allowances, allowances, deductions; a declaration, to be signed by a trustee, director, secretary or any authorized person of the organization, that the information contained in the declaration is true and correct; the period for filing returns should be as stipulated in the relevant tax laws, ”he said.
A representative of the JTB and its head of the legal unit, Nneka Esomeju, said CSOs that were registered as individuals or business names, or any other law at the subnational level, should also comply and fulfill their obligations. tax under the Personal Income Act. Tax Act and relevant with the State Tax Board.
She said: “If a civil society organization is not registered or supervised by FIRS, it must register and file its returns and pay taxes (if applicable) to the State Board of Internal Revenue. Not being registered with FIRS or CAC does not mean that you are exempt from taxes.
She also specified that “anyone who earns an income above the minimum wage threshold should pay taxes, regardless of their status.”
In addition, the head of the EU-ACT national program, Damilare Babalola, said he wanted to ensure that there is an open space for CSOs, NGOs and others to thrive.
“We have had several instances where nonprofits have failed to comply with the tax. On the other side, we have also heard that these tax obligations are not clear.
“So the idea is to bring the two players to the same table, where the opportunity is given to bondholders to explain what taxpayers are supposed to do,” he said.
Responding to development, some CSOs urged FIRS to reconsider its new tax campaign. They said adhering to the organization’s tax policy and the recent directive was not well thought out.
Coalition for the Defense of Nigerian Democracy and Constitution (CDNDC) organizer Ariyo-Dare Atoye said NGOs with the NIF pay taxes on staff salaries and allowances, withholding taxes on services and purchases like other legal persons.
“Maybe the FIRS is considering or is about to introduce another tax regime, which could be healthy and could have a negative impact on NGO revenues. For example, it will be nasty and unfair to tax the general income of NGOs and always expect them to pay taxes on services and purchases that are made afterwards. The desperation to generate money at any cost by this government should not be a reason to engage in abusive double taxation, which is capable of destroying services, businesses and livelihoods, including making money. very difficult NGO work.
“The government should listen to the opinions of experts on how to restructure the country and its economy to create wealth and easily generate income through a fair tax system,” Atoye said.
In addition, the director of the Health for Mother Earth Foundation (HOMEF), Nnimmo Bassey, an architect, said: “This is nothing new. We have had the TIN for a few years now. This does not necessarily mean that you are paying a tax on top of something like Value Added Tax (VAT), which we pay at the time of the purchase of certain goods.
“Already, non-governmental organizations have made statements and obtained an annual tax clearance. I think it helps the system to keep an eye on financial flows in charitable circles. “
For his part, the executive director of the Civil Society Legislative Advocacy Center (CISLAC), Auwal Musa Rafsanjani, who is also the head of Transparency International, Nigeria said: “If this development is intended to undermine and frustrate organizations of the society who are genuinely advocating responsible, transparent and accountable governance in Nigeria, this will surely not work. “
Rafsanjani, who was also recently appointed chairman of the board of Amnesty International, Nigeria, as well as the Transition Monitoring Group (TMG), said it was important for them to understand the key issues.
“Civil society organizations are exempt from paying VAT, or better yet, they have no VAT charges; and it is clear, following the law. This is because they do not generate income. It is also important to note that CSOs are expected to deduct PAYE from their employers’ salaries, as well as withholding tax from consultants who conduct studies.
“This is also clear in the law, because these employees are not exempt from tax. And this is where the need for TIN comes in so that those PAYE taxes can be paid appropriately and tracked as is.
“Civil society organizations like CISLAC have now set them up in accordance with the law. It is important that no official or citizen confuses these two. And I want to believe that the person in charge of the FIRS made a mistake or was quoted out of context, because the law on this subject is clear.
“The FIRS public relations or media department must educate the public on these issues so as not to create confusion. From my own understanding and the official quotes available from FIRS, the application for NIF is not new.
“CISLAC has the TIN and we are remitting. I think it is important not to combine VAT and PAYE. These are all taxes, but they are different. FIRS, for its part, must also properly sensitize the media and citizens to these differences, ”Rafsanjani said.