The Federal Government has said that Civil Society Organisations (CSOs) including non-governmental organisations and cooperative societies have responsibilities under the tax laws to fulfil their tax obligations irrespective of the nature of their operations.
The Federal Inland Revenue Service (FIRS) said this during a webinar it organised with the Joint Tax Board (JTB) and the European Union funded, British Council managed Agents for Citizen Driven Transformation (EU-ACT) Programme.
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The Executive Chairman of FIRS, Muhammad Nami, represented by the Coordinating Director, Compliance Support Group of FIRS, Dick Irri, said that FIRS would continue to partner with stakeholders such as the co-organisers of the programme in their drive to help educate taxpayers on their responsibilities.
He said that CSOs have the responsibility to file tax returns and statement of affairs and that the tax authorities would demand payment of taxes from CSOs only when the CSOs were engaged in businesses and make profits from the business ventures.
The Director Tax Policy and Advisory Department of FIRS, Temitayo Orebajo in his presentation on tax obligation of CSOs refuted claims by some individuals that CSOs have no tax obligation.
“There is a penalty for CSOs for not filing and there is a penalty for late filing. Whether you (CSOs) have something to do or not, you have the responsibility to file. After one year you are registered, in order not to run afoul of the law, you need to go and file at least your statement of affairs. It may be just one page document,” Orebajo said.
He said that CSOs include organisations, institutions and companies engaged in ecclesiastical, charitable, benevolent, literary, scientific, social, cultural, sporting or educational activities of a public character.
He said, “All CSOs are expected to register for tax purpose and obtain Taxpayer Identification Number (TIN). The following documents are required for tax registration: A copy of the registration certificate issued by the Corporate Affairs Commission (CAC) or any other instrument of registration; Certified True Copy (CTC) of memorandum and articles of association, constitution or rules and regulations governing the CSO; list and profiles of the Trustees/Board members nominated and other relevant documents.”
Another panellist and Deputy Director of Tax Policy and Advisory Department, Olatunji Olabode said that CSOs should file returns and pay taxes (where applicable) at MTOs closest to them or use the TaxPro Max Solution.
“Section 55(1) of CITA mandates every company in Nigeria including CSOs to file annual tax returns. A tax return comprises: an audited account, tax and capital allowances computations and a true and correct statement in writing containing the amounts of its surplus from each and every source computed; a completed self-assessment form; particulars as may be required in the form with respect to profits, allowances, reliefs, deductions required; a declaration to be signed by a trustee, director, secretary or any authorised person of the organisation that the information contained in the return is true and correct; the period for filing returns shall be as stipulated in the relevant tax laws,” he said.
A representative of the JTB and its Head, Legal, Nneka Esomeju, said that CSOs who are registered as individuals or business names or any other law at sub-national level should also comply fulfil their tax obligations under the Personal Income Tax Act and relevant with the State Board of Internal Revenue.
She said, “If any CSO is not registered or overseen by the FIRS, they should register and file their returns and pay taxes (where applicable) to the State Board of Internal Revenue. Not being registered with FIRS or CAC does not mean that you are exempted from taxes. She also clarified that any individual who earns income beyond the threshold of the minimum wage should pay taxes irrespective of the status of the individual.”
Also, the EU-ACT national programme manager, Damilare Babalola, said they are more interested in ensuring there is an open space for CSOs to thrive.
He said, “We have had several instances where non-profit organisations are not complying to tax and we also had from the other angle saying these tax obligations we are supposed to comply with are not clear to us.
“So, the idea is to bring both players to the same table where the opportunity is provided for the duty bearers to explain what taxpayers are supposed to be doing.”