Business
Workers in Lagos to pay more for income tax – LIRS
Workers in Lagos will have to pay more for personal income tax as the state Internal Revenue Service says this will now cover income from all sources as provided under the Finance Act, 2020.
The LIRS Chairman, Ayodele Subair, in a circular, clarified the position of the FA 2020 on the Personal Income Tax Act (PITA), which applies to Lagos tax laws.
Section 29 (2) of FA 2020 amended Section 33 (2) of PITA provided a new definition of gross income for the purpose of personal income tax. It states that ‘Gross Income’ is the income from all sources, less all non-taxable incomes, income on which no further tax is payable, tax-exempt items listed in paragraph (2) of the Sixth Schedule and all allowable business expenses and capital allowances.
This implies that “all statutory contributions to National Housing Fund, National Health Insurance Scheme, national pension scheme, life assurance premium and gratuities as enjoyed or subscribed to, by the taxpayer, to arrive at the gross income of a taxpayer which serves as the basis for computation of consolidated relief allowance (CRA),” he stated.
According to the PwC, this means that employees will no longer benefit from the tax relief previously claimable on income that relates to the National Housing Fund, pension contribution, and other tax-exempt items usually contained in the consolidated relief allowance.
Consolidated relief allowance is a relief granted to taxpayers to reduce the tax burden and increase disposable income.
“The new definition means that tax exempt items should now be deducted from gross emolument before computing the CRA,” PwC said in a policy document.
“As a result, employees will no longer benefit from the additional 20 per cent relief previously claimable on the portion of their income that relates to the national housing fund, pension contribution and other tax-exempt items.
“The reduction in CRA would result in higher effective tax rate and lower disposable income. Employers need to update their payroll templates or applications to ensure compliance.”
The Senate passed the 2020 Finance Bill in December, amending capital gains act; companies income tax act; industrial development (income tax relief) act; personal income tax act; tertiary trust fund act, customs and excise duties tariff; value-added tax act; stamp duties act; and electronic transaction levy.
The finance act amended the definition of gross income for the purpose of personal income tax.
Also, in paragraph 33 of the Third Schedule of the PITA (and section 22 of the finance act 2020), which is a catalogue of tax-exempt items.
The LIRS boss explained, with this, “All taxable persons in employment earning the gross income of national minimum wage, (currently set at N30,000 monthly – N360,000 per annum) or less are expressly exempted from paying personal income tax on the employment.
“Additional income from other sources excluding salaried employment of taxable persons on national minimum wage or less shall be subject to tax at the applicable rate(s).”
Auto
Cash rain at Toyota Nigeria Awards as Nestle, Zenith, Roxcon win big (+ photos)
Cash rain at Toyota Nigeria Awards as Nestle, Zenith, Roxcon win big (+photos)
Toyota (Nigeria) Limited (TNL) on Friday, May 17, 2024, named Nestle Nigeria Plc as winner of its prestigious Evergreen Customer Award for the Year (2023).
The company emerged winner among the teeming Toyota customers, having purchased the highest cumulative number of new Toyota vehicles consistently within a five-year period (2019 – 2023) from the TNL accredited dealers.
As the Evergreen customer, Nestle was rewarded with office equipment worth about N10 million, which was announced by the Chairman of Toyota Nigeria Limited, Chief Michael Ade.Ojo, at a well attended ceremony held in Lagos to celebrate the customers.
Nestle also won the Best Customer of the Year award, being the customer with the highest purchase of Toyota vehicles from the TNL dealers in 2023. It also went home with a cash award of N5 million.
Roxcon Nigeria Limited and Zenith International Bank received N3 million and N2 million respectively for emerging first runner-up and second runner-up in the 2023 TNL customers purchase assessment.
Ade.Ojo congratulated the winners and thanked them for their loyalty to the Toyota brand and Toyota (Nigeria) Limited’s superior quality products and after-sale support.
Even as he urged others to take a cue from the winners, he announced that next year’s winner of the biggest award, the Evergreen, would go home with a brand new Toyota vehicle.
The Managing Director of Toyota (Nigeria) Limited, Mr. Kunle Ade-Ojo, in his address at the event, spoke on the big idea behind the annual awards.
He said, “At Toyota (Nigeria) Limited, the philosophy of ‘Customer First’ remains the focal point of all our activities. Therefore, at every opportunity, we like to recognize and acknowledge our customers’ overwhelming love and support for us, which has been our driving force over the years.
“Your unwavering patronage of the Toyota brand and unshaken loyalty to it have been awesome.”
The MD said that the company had consistently held the awards every year since the inaugural edition in 2005 but only suspended it during the COVID period.
“We thank you for staying with us throughout the difficulties brought about by the pandemic,” he added.
Notwithstanding the economic challenges confronting business organisations in Nigeria, Ade-Ojo expressed the determination of the TNL team “to maintain our culture of providing superior quality products and services to our esteemed customers.
“We will continue to avail you of models that meet your specific needs supported by robust after-sale services.”
He commended the vision of the company’s Chairman, Chief M. Ade.Ojo, affectionately called Mr. Toyota, whose foresight and tenacity, he said, had changed the face of the automobile industry in Nigeria.
Business
Over 60% firms, individuals not paying tax, says LCCI president, warns against overtaxing
Over 60% firms, individuals not paying tax, says LCCI president, warns against overtaxing
President and Chairman of Council, Lagos Chamber of Commerce and Industry LCCI, Gabriel Idahosa, has cautioned against the multiplicity of taxes by the Federal Government, saying the development was not good for the economy. Speaking on an Arise television show monitored in Abuja, Idahosa said it was not possible to begin to raise money for every little thing in government.
He said the federal government should instead increase the capacity of the Federal Inland Revenue Service FIRS to collect taxes, noting that not up to 40 percent of taxable persons and organizations were taxed. According to him, the countries that are most efficient in tax collection are the countries that have the minimum number of taxes.
His words: “It is not really possible to begin to raise money for every little thing in government. To levy for cyber security, industrial training, insurance, levy for police trust fund and others, the whole approach in recent times of trying to put levy on everything is simply not the way to manage public finance in any country.
“The business of raising revenue for government is assigned to a specific organization in government which is the Federal Inland Revenue Service FIRS in the case of Nigeria. It is the business of the FIRS to get revenue for all the services of the Federal Government of Nigeria. The countries that are most efficient in tax collection are the countries that have the minimum number of taxes.
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It has been established during the time of the Taiwo Oyedele Tax Reform Commission that some of the levies and taxes that you create does not translate into significant increase in revenue and in any country, the agencies in charge of activities like these, whether it is high level intelligence or security, are funded from the budget of the country and the way they are funded usually is not a matter for public conversation. Nobody exposes the way the intelligence agencies of countries are funded.
“The technical issue of whether the Act was correct or not is minor. The big issue is should government of Nigeria encourage all agencies to be coming with all manner of levies for every single thing. You want something on health and you have a levy, in security you have a levy etc. That should be the more important conversation, that there should be a concerted effort to increase the capacity of the FIRS to do the job of revenue collection.
As we speak, not up to 40 percent of taxable persons are taxed. The first thing to do is to bring all taxable people into the net and then tax them accordingly. You don’t even need to raise the tax. More than 60 percent of taxable organizations and individuals are not paying tax. That should be the focus. The first level of taxation is identity. Identify economic actors at all levels right to the remotest villages.
The capacity of the FIRS to reach tax payers across the country was not built over time but with the dwindling of oil revenue, that capacity has been increased. You are beginning to see FIRS offices in several parts of the urban areas and state capitals but more than 60 percent of Nigerian businesses are not in the urban areas or state capitals. Any country that wants to collect tax, has to go very granular. Businesses that exist in every village must be taxed and that is where the FIRS is moving slowly but steadily”, he stated.
Over 60% firms, individuals not paying tax, says LCCI president, warns against overtaxing
Aviation
FAAN begins sale of e-tags at airports
FAAN begins sale of e-tags at airports
The Federal Airport Authority of Nigeria (FAAN) on Friday commenced the sale of electronic tags (e-tags) at airports.
The initiative, it said in a statement, was in line with the presidential directive that mandating the use of e-tags for accessing the nation’s federal airports.
“Following the presidential directive that all citizens are mandated to pay for e-tags at all the 24 federal airports across the country, we wish to inform the general public that the e-tags are available for sale from Friday, 17th May, 2024 at the following locations,” FAAN said.
“Lagos: Murtala Muhammed International Airport Lagos, Terminal 1, 5th Floor) Office of HOD Commercial. Contact: 08033713796 or 08023546030.
“Abuja: Nnamdi Azikiwe International Airport, HOD Commercial Office (General Aviation Terminal) Contact: 08034633527 or 08137561615.”
FAAN however said there would be an option to pay in cash at the access gates for motorists without e-tags.
On May 14, Minister of Aviation and Aerospace Development, Festus Keyamo, announced that everyone, including the President and Vice President, would pay tolls at the airports.
Keyamo said the government was losing over 82 per cent of the revenue it should have earned from the access fee.
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