Tax and Finance Advisory
Sylvester Njoku is a chartered accountant and tax auditor. He handles taxation issues with both FIRS and LIRS for his clients. He is well versed with the system and he advises SMEs and startups on how to go about their tax issues so they are compliance with the rule of law
Podcast Show Note
Setting up a business and what needs to be done?
There are two ways you can set up your business… either you set it up as an enterprise or limited liability company. For enterprise, you need to register with CAC, get your certificate of incorporation; then you go and register with FIRS Federal inland revenue services and the LIRS lagos inland revenue services.
Most times on registering with CAC they generate what they call a TIN – Tax Identification Number and you are supposed to do what they call open registration; then within max 6 months of registration, you go with your TIN to the nearest tax station within your locality to register.
What are some of the Business Tax requirements?
For the state government –Lagos for instance LIRS; is concerned about Payee taxees – pay as you earn tax and it’s paid by the employers. Employers must register their staff with LIRS. Others include payment for business premises which should be at firstly 10k and subsequently 5k; development levy which is annual warn off payment of N100 per staff yearly as well as payment of VAT and consumption tax (5% of Sales)
What documents should a business owner have prior to LIRS visit?
A business owner should have all corporate documents, and all the necessary invoices and sales reports. Based on these, you will be able to calculate your turn over, 5% VAT and 5% consumption taxes. Keep also your payment voucher.
When tax issues with the agency arises, what steps should a business owner take?
Most important thing is to get a good tax consultant who specializes in dealing with this.
What are the red flags that can get a business in trouble with the agencies?
- If you don’t have proper documentation
- Not remitting taxes when due
Advice for business owners who don’t remit their taxes when due?
Try and sign up with any of the LIRS office around you, even if your business is not doing well, because the liability that lies ahead far outweighs what there is now.
“Ignorance is basically not an excuse” when the law catches up with you, you’ll pay lot more liabilities.
- Truth be told, you ought to pay your taxes
- A business owner ought to keep all the necessary invoices and sales dockets
- Calculate your turn over, 5% VAT and 5% consumption taxes regularly
- Get a good tax consultant who specializes in dealing with this