This Circular is issued for the information and guidance of the general public, employers of labour, business owners, and branches of business entities in line with the provisions of the relevant tax laws. For clarity, the following are tax entities for PAYE Remittance and Returns, and WHT Remittance and Returns.
a. Nigerian Companies and Business names in Federal Capital Territory;
b. Branches of Nigerian Companies and branches of Business names in Federal Capital Territory; and
c. Government Ministries, Departments, Agencies and Parastatals in Federal Capital Territory.
1.0 Introduction.
This information circular provides clarification on the provisions of section 74 and 81 of Personal Income Tax Act (as amended) and paragraphs 12 and 27 of Tax Administration (self-assessment) Regulation 2011.
2.0 PAYE Deduction and Remittance.
2.1 In line with paragraph 12 (b) of Tax Administration (self-assessment) Regulation 2011, an employer shall;
I. within ten days of the end of every month, pay to the designated bank of the relevant tax authority, all taxes deducted under the Pay-As- You–Earn( PAYE) regulations with accompanying return as may be approved by the relevant tax authority showing the total emolument and the total tax deducted from each employee during the month; not later than thirty days after the end of each year, render to the nearest tax authority, on the prescribed forms as may be approved by the relevant tax authority, a return in respect of each employee the total emolument during the year with tax relief, if any and the total deducted from the employee accompanied by a statement and declaration under oath on the relevant form.
2.2 Penalty
In line with section 81 (3) of Personal Income Tax Act.
“Any employer who contravenes the provisions of this section shall be liable on conviction to a penalty of N500,000.00 in the case of body corporate, and N50,000.00 in the case of an individual”.
3.0 Penalty for failure to deduct tax.
In line with section 74 of Personal Income Tax Act (as amended) “any person or body corporate who, being obliged to deduct tax (withholding Tax) under section 69, 70, 71, 72 and 73 of this Act, fails to deduct, or having deducted, fails to remit such deductions tothe relevant tax authority within thirty days from the date the amount was deducted or the time the duty to deduct arose, shall be liable to a penalty of an amount of 10 percent fine of N5,000.00 or 10 percent of the amount of the tax due, whichever is higher, in addition to the amount of tax deductible or deducted plus interest at the prevailing commercial rate”.
3.1 For all tax entities that have not complied with any item in this publication, a grace period of thirty days from the date of this publication is given to enable them comply. FCT-IRS will not hesitate to SEAL OFF the offices of non-compliant tax entities after the said date.
3.2 Likewise, Offices that posit that their Head Office located outside FCT is responsible for its Tax Matters should bring this notice to the attention of its Head Office for strict compliance to avoid business disruptions in its branches within FCT.
3.3 All MDAs that are on IPPIS should note that IPPIS is not saddled with the responsibility of submitting employee’s emolument returns nor providing evidence of remittance of PAYE deducted to the relevant tax authorities. The responsibility is imposed on the MDAs by the virtue of section 81 of Personal Income Tax Act (as amended) and paragraph 12 of Tax Administration (self assessment) Regulation 2011. MDAs are to obtain evidence of remittance of PAYE deducted from its employees from IPPIS and forward same along with the PAYE deduction schedule to the tax authority on or before 10th of the following month in line with the provisions of the tax laws.
4.0 Amendment or Revision of the Circular
The Service may, at any time, withdraw or replace this Circular or publish an amended or updated version.
5.0 Enquiries
Any request for further information or clarifications on this Information Circular should be directed to the:
Executive Chairman
Federal Capital Territory Internal Revenue Service
FCT-IRS Headquarters
No. 3 Abriba Close Off Yola Street
Area 7 Garki, Abuja.