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FAQs


 
FACTS ABOUT OBTAINING, UPDATING AND VALIDATING YOUR TAXPAYER IDENTIFICATION NUMBER (TIN)
 
 
The Taxpayer Identification Number (TIN) is a unique number allocated and issued to identify a person (Individual or Company) as a duly registered Taxpayer in Nigeria.  It is for use by that Taxpayer ALONE.  Registration for tax purposes is a legal obligation of every person who is required to pay tax in Nigeria.
The following necessary details for obtaining and updating TIN should be presented to the Tax Office nearest to the address of the Taxpayer.
 

 OBTAINING TIN

For a Company, Enterprise or Business registered with the Corporate Affairs Commission (CAC)
1.            Duly completed Application form for TIN;
2.            EITHER Certificate of Incorporation (for a Company) OR Business Name Registration Certificate (for an Enterprise & Business) showing clearly the Registration Number in each case;
3.            Documents containing the following information:

 

i.              ADDRESS of Company, Enterprise or Business;

 

ii.             Principal LOCATION of business;
iii.            DATE of COMMENCEMENT of business.
For an Individual who (or whose business) is not registered with the CAC
1.            Duly completed Application form for TIN
2.            Any of the following valid (current) identification documents:
·         International Passport;
·         National Identity Card;
·         Staff Identity Card (employed persons);
·         National Driver's License.
The following RULES are important:
(i)            All information marked * on the application form MUST be provided;
(Ii)          The characters of the NAME i.e. letters and other symbols constituting the name MUST NOT exceed two hundred (200);
(iii)          The characters of the ADDRESS also MUST NOT exceed two hundred (200);
(iv)         Email address must be UNIQUE and ACTIVE;
(v)          Mobile Telephone Number MUST be eleven (11) digits e.g. (08763201210).
UPDATING TIN
Updating TIN under the 'National Single Window' System is a requirement for taxpayers with incomplete records with Federal Inland Revenue Service (FIRS).
TIN may be updated at the Tax Office where it was initially generated by providing the following additional information:
1.            Email Address;
2.            Phone Number.
After updating, the system indicates that “The TIN has been successfully updated”.
The Joint Tax Board TIN (JTB TIN)
It is important for a person to note the following information about the JTB TIN:
(i)            The JTB TIN is designed to subsequently replace the current TIN and is already in use within FIRS and several other States of Nigeria;
(ii)           The major difference is that the JTB TIN has ten (10) digits, it is uniform and general across Nigeria. It is UNIQUE for every registered taxpayer in Nigeria and not limited to FIRS Taxpayers alone;
(iii)          The JTB TIN is presently being issued out at the point of registration and also updated by FIRS and the States which have so far adopted it;
(iv)         Every Taxpayer in Nigeria will ultimately be required to possess and use ONLY the JTB TIN.
VALIDATING TIN
TIN validation is the process of confirming that the updated TIN meets the necessary conditions for transacting business with other Organizations such as Nigerian Customs Service (NCS),
Central Bank of Nigeria (CBN), National Agency for Food and Drug Administration and Control (NAFDAC), etc.
A Taxpayer can validate his/her TIN directly on the FIRS Trade Portal i.e. www.trade.gov.ng/firs by following the simple procedure and rules below:
(i)            Enter the TIN and the same email address that was provided to the Tax Office when updating;
(ii)           NEXT, enter the security word (captcha) and click on “Validate”;
(iii)          If the validation is successful,  the following confirmation notice shall be displayed:
“Register with NCS - Done”
(iv)         THEN, an automatic email notification from “Nigeria Single Window” with a log-in password and instruction on how to complete the registration process would be sent to the Taxpayer's email address;
(v)          Upon completing the validation exercise, an email will automatically be sent to the email address provided confirming successful validation. A Taxpayer should therefore check the email including spam folder.
AUTHENTICATING TIN
This is for the Taxpayer to re-confirm his/her updated and validated TIN.
A Taxpayer experiencing difficulty in validating TIN (receiving Error Messages) should seek professional assistance from the Tax Office or send email to: tinupdate@firs.gov.ng or support@ovalwavetelecom.com.

 

 
  
 

 
ERROR MESSAGE
ACTION TO BE TAKEN
 
1
Error in processing your validation request.
Contact Web Fountain (WF) Helpdesk under NCS
 
2
Either your email, name, address or telephone details was not declared to FIRS.
Contact FIRS. It might be necessary to update your details at the nearest FIRS office.
 
3
The information declared to FIRS is invalid
Contact FIRS. It might be necessary to update your details at the nearest FIRS office.
 
4
The TIN information provided does not exist: [XXXXXXXX-XXXX].
Contact WF Helpdesk
 
5
There is no email declared to FIRS.
Contact FIRS to register your email address
 
6
The Email address provided should be the same as what has been declared to FIRS.
·         Verify that you have entered the correct TIN number and the right email address.
·         If this error persists, verify with FIRS that you have given the correct Email address.
 
7
The Email address provided should be the same as what has been declared to FIRS.
Contact FIRS.
 
8
The Email declared to FIRS is invalid
Contact FIRS to register a valid email.
 
9
There is no address declared to FIRS.
Contact FIRS
 
10
The Address declared to FIRS is invalid.
Contact FIRS
 
 
 
 
 
12
There is no phone number declared to FIRS
Contact FIRS
 
13
The phone number declared is not valid.
Contact FIRS
 
14
Company TIN is required
Enter your correct TIN in field
 
15
The Company specified is not valid
Check and enter correct format of TIN and email address
 
16
The name of business declared to FIRS is invalid.
Contact FIRS
 
17
The Company's RC number is required
Contact FIRS to update
 
18
The Company's RC number is invalid.
Contact FIRS to update
 
19
Company's email is not unique.
Contact FIRS to update
 
20
Invalid TIN/Password.
Check and re-enter the TIN
 
21
Error in processing your registration request.
Contact WF Helpdesk
 
22
Your TIN is already registered: [XXXXXXXX-XXXX]
Contact WF Helpdesk
 
23
The entered characters do not match with displayed image.
·         Try again;
·         Check and enter display image
 
 
For Enquiries & Clarifications

 

Executive Chairman
Federal Inland Revenue Service 
15, Sokode Crescent, Wuse Zone 5, Abuja Nigeria 
www.firs.gov.ng 
+234(0)96701647 
or
Taxpayer Service Policies Processes & Programme Department
tspppd@firs.gov.ng

 +234(0)8115900595; +234(0)8115900596

 

 
 
 
 
SECTION A: GENERAL TAX ADMINISTRATION
 
Question 1     What happens when a taxpayer`s payment is posted to a wrong tax office?
Answer           This can only be possible if the taxpayer does not have a TIN or the bank`s branch teller entered a wrong TIN which is either for another taxpayer or the TIN does not even exist. The system administrator, if informed officially, will reclassify the tax office or such payment.  In cases where the taxpayer does not exist in the database, the registration officer will create the taxpayer and the system will generate a valid TIN for the taxpayer. Also, in cases where the TIN was wrongly assigned to a tax office, the TIN can be redirected to the correct office.
 
Question 2     How does FIRS prevent issuance of multiple receipts for same payment?
Answer           The automated receipts and credit notes issuance will eliminate issuance of multiple receipts.
 
Question 3     If a taxpayer gives a cheque to a bank in his office without going to the bank,    how can the taxpayer know whether payment has been made to FIRS account?    
Answer           The taxpayer should insist on the bank delivering the e-ticket to him which will indicate the date and time payment was captured into FIRS account by the bank.
 
 Question 4     If someone lives in Kaduna and pays his tax there, can he obtain his TCC in Abuja ?         
Answer           No, one can only obtain his/her TCC from the Tax Authority where the person is registered for tax purposes and has been paying his taxes in compliance with the rule of residence as contained in the tax law.
 
Question 5     Is medical allowance taxed?
Answer           Yes. If it is paid directly to the hospital, Withholding Tax (WHT) should be deducted and if it is given to an employee in the form of allowance, it is taxed under PAYE.
 
Question 6     Can  a taxpayer pay to any collecting bank branch?
Answer           Yes. There are no designated bank branches for any tax offices or tax types. All approved Lead/Collecting banks can collect for all offices and tax types.
 
Question 7     What is the process involved in getting back tax payment erroneously credited in the name of the depositor instead of the taxpayer?
Answer           Any tax paid in error can be reversed by the collecting bank within 24 hours if the bank is put on notice within the period. However, if the error was not detected on time, refund can be made by FIRS on request through e-payment platform with the option to use it to set-off future tax.
 
Question 8     Why does it take more than two weeks to issue TCC even if the taxpayer pays tax in cash?
Answer           TCC can only be issued only after all taxes payable by the taxpayer for the past three preceding years have been paid. The statutory standard of issuing TCC within two weeks is still in force. However, the two weeks start to count only after all taxes have been paid and from the day the taxpayer files application for TCC with the Tax office and not from the date of payment of taxes to the Banks.
 
Question 9     On what basis will an application for TCC be rejected after two weeks and still be under processing?
Answer           TCC can be rejected on the following grounds:
a.      Where taxes have not been paid
ii      Where penalties or interest is still outstanding
            iii.    Where outstanding returns have not been filed
iv.   Where there are outstanding issues arising from tax queries, audit or      investigation.
            v.      Where the case is with the Tax Appeal Tribunal (TAT) for hearing and part of the tax has not been paid as required
TCC once rejected cannot be said to be still under processing, but it is kept on hold until issues outstanding have been resolved or sorted out by the taxpayer with the relevant office.
 
Question 10   Is installment Payment no longer allowed for self assessment filers?
Answer           The tax law still recognizes the granting of installment payment to self assessment filers. However, this can only be granted on application by the taxpayer to the tax office.
 
Question 11   Why does FIRS still refuse to issue TCC after PAYE has been deducted from the staff salary?
Answer           FIRS does not deny issuance of TCC to any taxpayer who has paid his tax liability in full. However, TCC request is rejected where the taxpayer still has outstanding liability to pay.
 
Question 12   What is Tax avoidance and Tax evasion ?
Answer            Tax Avoidance: - This is considered as a way of identifying the loop hole in the tax law and then taking advantage of such loop hole to reduce the tax payable
   Tax Evasion: -       This is a deliberate and illegal act of the taxpayer not to pay the correct tax
 
Question 13   What is Accounting year and Accounting period ?
Answer           Accounting Year:-    This is a twelve (12) months period over which an entity`s financial accounts are made-up.
                        Accounting Period:- This simply means the period with reference to which financial accounts of an entity are prepared.
 
Question 14   Is inclusion of Taxpayer Identification Number (TIN) on a Contractor’s quotation necessary?
Answer           Yes it is mandatory.
 
Question 15   What is the meaning of due date?
Answer           Due date is the date prescribed by law for filing of tax returns and making of tax payments by taxpayers. All tax types have their different due dates as provided by the relevant tax laws.
                        Due dates for other tax types are as shown below:
 
 
                                       DUE DATES OF FILING TAX RETURNS
S/N
DUE DATES
TYPES OF TAX RETURNS
1.
a) For old companies, six (6) months after the end of the company`s accounting year.
b) For new companies, eighteen (18) months from the date of incorporation or six (6) months after the end of the company`s first accounting period whichever is earlier.
Company`s Income Tax (CIT) Filing Date
2.
As in the case of CIT
Education Tax (EDT)
3.
As in the case of CIT
National Information and Technology Development Levy (NITDL) (for applicable companies only)
4.
Two (2) months after the commencement of the company`s accounting period
Estimated Petroleum Profit Tax (PPT) Returns
 
5.
Within five (5) months after the end of the company`s accounting period
Final PPT Returns
6.
31st March
Personal Income Tax (PIT)
7.
31st January
Annual Returns of Pay As You Earn (PAYE) (By Employers)
8.
10th of every month
PAYE Returns (By Employers)
9.
21st of every month
Withholding Tax (WHT)Returns
10.
21st of every month
Value Added Tax (VAT)Returns
 
 
 
                 SECTION B: PERSONAL INCOME TAX (PIT)
 
Question 1     What is P. A. Y. E?
Answer           P. A. Y. E. is an acronym for “Pay As You Earn”. It is a method of collecting personal income tax from employee`s salaries and wages through deduction at source by an employer as provided by the relevant sections of Personal Income Tax Act (PITA). (S.81 of Personal Income Tax Act Cap P8 LFN 2004)
 
Question 2     What is the due date for remitting PAYE?
Answer           The due date for remitting PAYE is 10th day of every month following month of deduction
 
Question 3     Why do PAYE charges vary from Ministries to Ministries for the same level of income/salary?
Answer.          PAYE does not differ because the rates used for computation are the same. PAYE rates are as shown in question number 4 below.
 
Question 4     What are the current tax rates applied on taxable income?
Answer           The current rates applicable to the taxable or chargeable income are as follows:
                                                1st       N300, 000.00 @ 7%
                                                Next    N300,000.00 @ 11%
                                                Next    N500,000.00 @ 15%
                                                Next    N500,000.00 @ 19%
                                                Next    N1,600,000.00 @ 21%
                                                Above  N3,200,000.00 @ 24%
 
 
Question 5     Is the submission of comprehensive list of staff with PAYE deductions different from submission of annual returns?
Answer           No. Comprehensive list of employees with PAYE deductions is continuously submitted on monthly basis each time PAYE is being remitted to FIRS, while annual returns (form H1) is to be submitted by 31st day of January of every year by every employer to enable the Tax Authority ascertain whether the correct deductions and payments of tax have been made for the previous year (period of twelve months) for all its employees.
 
Question 6     What is benefit-in-kind?
Answer           Benefit in kind may be defined as those benefits or perquisites that accrue to a person by reason of office and/or position he/she occupies. Benefits in kind include such benefits as official car, official accommodation, cooks, gardeners, securities etc.  It is taxable after certain deductions/reliefs granted.
 
Question 7     Where should PAYE deductions of staff working in Abuja but residing in Suleja or Mararaba be remitted to?
Answer           By residency rule, an employee’s PAYE is payable to the Tax Authority of his/her place of residence. It is therefore the duty of the employer to deduct and remit it to the Tax Authority where the employee is resident that is Niger State Internal Revenue Service or Nasarawa State Internal Revenue Service respectively.
 
Question 8     What is the minimum tax rate for Personal Income Tax?
Answer            The minimum tax rate is 1% of total income. It is applicable if the taxable income is below N300, 000
Question 9     Is it possible to apply for a refund for excess PIT tax deductions/payments ?
Answer           Yes; the law provides that excess tax paid by any employee shall be refunded on application by the employee with the option of set-off against future tax liability.
 
Question 10   When there is under deduction of tax in the employee’s income, who bears the burden of the under deduction?
Answer           When there is an under deduction of tax in staff salary, the staff whose tax is under deducted bears the burden.
 
Question 11   What is Gross Emolument/salary?
Answer            Personal Income Tax Act (PITA) as amended defines Gross Emolument as the aggregate of wages, salaries, allowances (including benefits-in-kind), gratuities, superannuation and any other income derived solely by reason of employment.
 
Question 12   What are non taxable deductions under PIT Act?
Answer           The sixth schedule of PITA as amended specifies the following as tax exempt. They are:
                        a) National Housing Fund contributions
                        b) National Health Insurance Scheme contributions
                        c) Life Assurance Premium
                        d) National Pension Scheme
                        e) Gratuities
 
Question13    Is it within the law for a state tax authority to charge interest, penalty and threaten distrainment for a shortfall between the PAYE remitted by a company and the expectation on the company`s tax deduction cards, going by the fact that actual tax could differ from expectations as a result of salary cuts and staff exits?
Answer           It is lawful for a state tax authority to carry out audit of your returns to ascertain compliance. It is also lawful for penalty to be charged on any shortfall. It should be noted however that there must be reconciliation meeting by both parties where all issues must be discussed and agreed. Where a taxpayer is still not pleased with the decision reached, the taxpayer has the powers as conferred by the PITA (as amended) to appeal to the Tax Appeal Tribunal.
 
Question 14   What is the tax implication of giving new/used vehicles to staff for use in an organization?
Answer           This is treated as benefit - in - kind. 5% of the value of the vehicle is calculated and added back to the income of staff and taxed.
 
Question 15   What is the current Relief claimable under Personal Income Tax Act?
Answer           The Personal Income Tax Act (PITA) as amended provides for Consolidated Relief Allowance (CRA) of N200,000.00 subject to a minimum of 1% of gross income whichever is higher plus 20% of gross income and the balance shall be taxable in accordance with the tax rates in schedule six (6) of the Act and as in Question four (4) of this section.
                            
                
 
                          SECTION C: VALUE ADDED TAX (VAT)
 
Question 1     What are VATable goods?
Answer     All goods manufactured/assembled in or imported into Nigeria, except those specifically exempted under the law. Examples of VATable goods include jewelries, shoes, bags, television etc.
 
Question 2     What are VATable Services?
Answer           All services rendered by any person in Nigeria except those specifically exempted under the law.  Examples of VATable services are, services rendered by Lawyers, Engineers, Accountants, Contractors and Consultants etc.
 
Question 3     What are exempted goods under Value Added Tax (VAT) Act?
Answer:         Exempted goods are those goods which are not subject to VAT.
                        These include:
·         All medical and pharmaceutical products;
·         Basic food items;
·         Books and Educational materials;
·         Baby products;
·         Fertilizer (locally produced), agricultural and veterinary medicine, farming machinery and farming transportation equipment;
·         Plant and Machinery imported for use in the Export Processing Zone or Free Trade Zone; provided that 100% production of such company is for export
·         All commercial Aircraft and Aircraft spare parts imported for use in Nigeria
·         Amorphous Pet Chips (H S Code 3907.6000.00)
 
Question 4     What are exempted services under VAT Act?
Answer           Exempted services are services that are not VATable, i.e. not subject to 5% VAT. These include:
-          Medical services
-          Services  rendered by Community Banks,
-          People’s Banks and Mortgage Institutions,
-          Plays and performance conducted by the educational institutions as part of learning.
-          All exported services
 
Question 5     What is Zero-rated VAT?
Answer           Zero-rated VAT means whereas the goods and services are VATable, the applicable rate is zero percent (0%).
 
Question 6     Which transactions are zero-rated?
Answer           The following transactions are zero-rated. There are:-
i.      Non-oil exports
ii.     Goods and Services purchased by Diplomats
iii.    Goods and Services purchased by humanitarian donor-funded projects
 
 Question 7     What is the due date of filing VAT Returns?
Answer           The due date for filing VAT is 21st day of every month following month of transaction
 
Question 8     When a contractor/supplier supplies goods that are exempted from VAT, should VAT be paid?
Answer           Goods exempted from VAT are not VATable.
 
Question 9     Are entertainment services VATable?
Answer           Yes.  They are VATable services except as contained in the exempted services list.
 
Question 10   Are catering services VATable?
Answer           Yes. Catering services are VATable.
 
Question 11   Can Ministries, Departments, Agencies (MDAs) exempt foreign investors from paying VAT?
Answer           No. Ministries do not have statutory power to exempt a taxpayer from payment of tax or to amend the tax laws.
 
Question 12   Who is a VATable Person?
Answer           A VATable person under Value Added Tax Act (VATA) Cap VI LFN 2004 is “a person (other than a Public Authority acting in that capacity) who independently carries out in any place an economic activity as a producer, wholesaler, trader, supplier of services (including mining, and other related activities) or person exploiting tangible or intangible property for the purpose of obtaining income by way of trade or business”.
In other words, a VATable person is one who trade in VATable goods and services for a consideration. 
 
Question 13   Is it compulsory for a VATable person to register for VAT?
Answer           Every VATable person has an obligation to register for VAT payment. 
 
Question 14   Who is a VAT Agent?
Answer           VAT AGENT: - Are agents of Revenue Collection with regards to Value Added Tax.  They facilitate the deduction and remittance of VAT to the Revenue Office e.g. Ministries/Government Agencies/Parastatals and Oil companies
 
Question 15   Is VAT registration for individuals or corporate bodies?
Answer           It is for all so long as they are trading on goods and services as defined by law.
 
Question 16   What are the penalties for non - registration of VAT?
Answer           Failure or refusal to register with the Board within the specified time. The taxpayer shall be liable to a penalty of N10,000 for the first month in which the failure occurs and N5,000 for each subsequent month in which the failure continues.  If this persists, the premises where the business is carried on shall be sealed up.
 
Question 17   What are the penalties for non - deduction of VAT?
Answer           Non deduction or failure to collect tax by a taxable person attracts a penalty of 150% of the uncollected tax plus 5% interest above the CBN’s discount rate.
 
Question 18   What are the penalties for non – remittance of VAT?
Answer           Failure to remit tax shall attract a penalty of a sum equal to 5% per annum plus interest at a commercial rate payable within 30 days of notification by the Tax Authority
 
Question 19   Why is VAT on certain goods and services paid in foreign currency?
Answer           Taxes are to be paid in the currency of transaction.
 
Question 20   Should Ministries issue contractors with receipts for VAT payment in place of FIRS receipt?
Answer           No.  Receipt acknowledging payment is only issued by FIRS.
 
Question 21   Most times organizations make part payment to contractors.  When should VAT be deducted?
Answer           For any payment made, the corresponding VAT should be deducted and remitted.
 
Question 22   Does FIRS grant refund on VAT to non-citizen who are leaving the country?
Answer           Section 23 of FIRS Establishment Act allows for refunds. Goods consumed in the country for which VAT was paid is not refundable.
 
Question 23   How is VAT on goods sold treated?
Answer           VAT element on goods sold is deducted and remitted to the FIRS through any of the approved collecting bank on or before the 21st day of the month following the month of sales.
 
Question 24   What does “VAT Inclusive” mean?
Answer           VAT inclusive means that VAT is already included in the cost of transaction (i.e. goods and services contract). However, the term is being discouraged as it is always advised that VAT be isolated and not included as part of the total invoice value.
 
Question 25   Some contractors charge 10% for VAT. Is it allowable?
Answer           No.  The 10% charged on VAT is wrong.  The Correct rate is 5%.  The contractor should not assume 10% to mean 5% for VAT and 5% for WHT. The two should be treated separately. WHT is deduct from the contract sum and therefore paid by the contractor, while VAT is paid as an addition to the contract sum by the consumer of the goods/services.
 
Question 26   What is input VAT?
Answer:         Input VAT is VAT paid on raw materials or goods and services used for production purposes or goods for resale or goods imported directly for resale.
 
Question 27   What is output VAT?
Answer           Output VAT is VAT charged by taxable persons on goods and services supplied.  Where output VAT is more than the Input VAT, the difference is paid to FIRS, but where Input VAT is more than output VAT, the taxable person claims a refund.
 
Question 28   How can input/output VAT be resolved at the Ministry or Parastatal level?
Answer           The issue of input/output VAT cannot be resolved by Government Ministries/Departments/Agencies.  However, for further clarification FIRS should be consulted.
 
Question 29   Are the services of a motor mechanic VATable?
Answer           Services provided by mechanics are VATable.  Even the motor or vehicle spare parts used for the services are subject to VAT.
 
Question 30   Do Mortgage Institutions pay VAT?
Answer           VAT is exempted only on the primary duties of mortgage institutions.  Any other activity (e.g. contract execution) outside their primary banking function attracts VAT.
 
Question 31   What happens in the case of electricity consumption? Who deducts VAT and how?
Answer           VAT is charged on the consumer by PHCN or the electricity company and is collected also by the company who is expected to remit same to FIRS.
 
Question 32   Is VAT a multiple Taxation?
Answer           No. VAT is not a multiple taxation, but a multi-stage tax; it is a consumption tax
 
Question 33   When should a Taxable person register for VAT?
Answer           All companies/organizations that have been in existence before the VAT Act came into operation in 1993 were expected to register for VAT within six months from the date of commencement of the Act.  New companies that came into operation after the commencement of the Act are expected to register for VAT within six months of commencement of business.
 
Question 34   Should VAT be paid on commercial rent?
Answer           Yes. VAT at 5% should be paid by the tenant on rent paid for use of property for commercial purposes.
 
Question 35   Is VAT payable on Non-oil product export?
Answer           All exports are zero rated i.e. tax rate applicable is 0%.  This means that all input VAT incurred in the production process up to the point of export is refundable.
 
 
 
                          SECTION D: WITHHOLDING TAX (WHT)
 
Question 1    What is Withholding Tax (WHT)?
Answer           Withholding Tax is basically an advance payment of income tax which may                      be used to offset or reduce tax liabilities. Or an advance tax to be applied as tax credit to settle the income tax liability of the year of assessments to which the income that suffered the deduction relate. Withholding Tax is not a tax but a prepaid tax.
  
Question 2     What is the due date for remitting WHT returns?
Answer           The due date for remitting WHT returns is 21st day of every month following the month in which the deductions were made.
 
Question 3     What  is the Rate of Withholding Tax for Companies and individuals on transactions?
Answer           Rates of WHT for corporate companies and individuals on transactions are as follows:-
 
TRANSACTIONS
COMPANIES (%)
INDIVIDUALS (%)
Royalties
10
5
Contract of Supplies
5
5
Contract of Construction
5
5
Dividend
10
10
Technical Service
10
5
Professional Service
10
5
Consultancy
10
5
Management Service
10
5
Commission
10
5
Rent
10
10
Interest
10
10
Hire, Charter, Lease
10
10
Directors fees
10
10
 
Question 4     What is the content of remittance schedule of Withholding Tax Returns?
Answer              i. Name and address of the Agent/Depositor.
              ii. TIN of the Agent/Depositor
             iii. The name and address of the Taxpayer/Beneficiary
                         iv. TIN of the Taxpayer/Beneficiary
                         v.  The nature of transaction
                         vi. The gross value of the business on which WHT is being deducted
                        vii. The applicable rate of WHT
                       viii. The amount of WHT deducted.
                         ix. Period covered
 
Question 5     What is Withholding Tax Credit Note?
Answer           This is the document issued by the Tax Authority showing that a taxpayer has suffered tax deduction at source.
 
Question 6     What are the contents of Withholding Tax Credit Note?
Answer            Withholding Tax Credit Note will generally include the following information:
·         Credit note Number.
·         The name of the agent/taxpayer who deducted and remitted the Withholding Tax.
·         The name of beneficiary from whose income WHT was deducted.
·         The nature of transaction.
·         The date of the transaction.
·         The name of the bank through which remittance was affected.
·         The amount deducted
·         The period covered
 
Question 7     Can WHT Credit note be used to offset late returns penalty (LRP)?
Answer           No, WHT Credit Note cannot be used to offset LRP. Penalty is not
                        Tax, WHT Credit Note can only be used to offset income tax due.
 
Question 8     Why does it take longer time to confirm WHT Credit Notes issued
                        by the same FIRS?
Answer           Confirmation of WHT Credit Notes took longer time because of the manual processes involved. Confirmation will now be done on-line with the coming of the FIRS web-portal
 
Question 9    Is mobilisation fee liable to WHT?
Answer        Yes, Mobilisation fee is liable to WHT. In addition, every Certificate of work done  
issued at the different stages of a contract must be subjected to 5% WHT. However, the amount of WHT being deducted at source from the mobilisation fee paid at the inception of the contract should be adjusted (deducted) from the WHT due on the next payment in respect of the certificate of work done issued and the balance should be remitted to the relevant tax authority.
 
Question 10   Who are the agents of WHT?
Answer          The agents of WHT are;
i.                    Corporate bodies (companies)
ii.                  Individuals, firms and sole traders.
iii.                A statutory body, a public authority and other institutions or organisations.
iv.                Government Ministry, Department or Agency  and Local Government.
 
Question 11   Is there any exemption from Withholding Tax ?
Answer            Yes, there are certain transactions that are exempted from WHT,
                          such as;
i.              Direct purchase across the counter,
ii.             Direct purchase of raw materials from supplier as distinct from contract of supplies
iii.            Sale in the ordinary course of business.
iv.           All imported goods.
v.            Inter- bank interest.
vi.           Income exempted from income tax
vii.          Claims in insurance business
viii.         Interest on Bonds
ix.           Dividends redistributed by Holding Companies
 
Question 12   What are the relevant documents required for filing WHT Returns?
Answer           Relevant documents for filing WHT includes:
i          Evidence of payments to an authorised banks – e-ticket
ii.             Schedule of WHT deducted showing:
a.    Period covered
b.    Name of supplier
c.    Addresses
d.    Nature of supply
e.    Gross amount
f.     WHT rate
g.    WHT amount
h.    TIN of agent making remittance
i.      TIN of beneficiary (taxpayer).