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Company Tax: A Businessman Guide(premium Post) by legalifyNg: 5:46pm On Apr 20, 2017 |
(5 Minute Read) If you want to teach your child about taxation, take 30% of his Ice cream! Thus, the imposition of tax is statutory to enable government meet its obligations. The Constitution of the Federal Republic of Nigeria 1999 (as amended) under Section 24(f) stipulates that, “it shall be the duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly”. Companies also fall within the categories of persons that are taxable in Nigeria. Companies are taxed under the companies income tax introduced in 1961 with modification in 2007. The administration of the companies’ income tax in Nigeria is vested on the Federal Inland Revenue Services. The tax is payable by all companies at the rate defined by the Companies Income Tax Act (CITA)_ Meaning of tax The Black’s law Dictionary defines it as “Monetary charge imposed by the government on person’s entities or property, levied to yield public revenue”._Ola also similarly defined taxation as the demand made by the government of a country for a compulsory payment of money by the citizens of the country._ Ayua_ concludes that: “The most important thing is a pecuniary burden laid upon individuals or persons or property to support the government and is a payment exacted by legislative authority” A tax may be direct or indirect. It is direct where it is levied on the person who is intended, should pay .This is usually the case in the taxation of income. For example companies’ income tax and personal income tax are direct taxes. It is indirect if the levy is imposed on one person who pays with the expectation to pass the burden unto third parties. Custom duties and value added tax are example of indirect taxes because the levy imposed by the government is factored into the price of the item upon which they are levied and passed unto the consumer The meaning of company It is pertinent to identify company that falls within this category for the purpose of taxation because not all company are taxable, However, all companies in Nigeria are liable to pay companies Income Tax on their profits accruing in, brought into, derived from or received in Nigeria. It should be noted that company duly registered in accordance with the provision of the Companies and Allied Matters Act (hereinafter referred to as CAMA) or any enactment replaced by it is what the Act recognizes as a company in Nigeria Although CAMA defines a foreign company to mean company incorporated elsewhere than in Nigeria, it does not recognize its existence in Nigeria for business activities. It only defines it for the purpose of identifying it to comply with the mandatory incorporation processes before carrying on business in Nigeria_and to benefit from exemption from registration_ . Section 54(1) CAMA provides that: Subject to Sections 56 - 59 of this Act, every foreign company which, before or after the commencement of this Act, was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents as matters preliminary to incorporation under this Act. However, the Companies Income Tax Act (CITA).......... Read the rest: Visit www.legalify.ng/blog Special Guest Post by Ikubuwaje Anthony Esq. Feel free to drop feedbacks and comments, or contact me with suggestions for topics you’d like to see written about — using our handles. Follow us on Twitter : @LegalifyNg Like our Facebook page: Legalifyng www.legalify.ng
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Re: Company Tax: A Businessman Guide(premium Post) by tck2000(m): 8:51pm On Jan 07, 2020 |
legalifyNg: |
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