At the beginning of each year, individuals, just like government and corporate organizations, set goals with timelines and strive towards achieving them as the dates counts. To this end, activities such as strategic meetings, retreats wherein issues that may bother on carrier, self-development, administration, finance, dividends, insurance, budgeting, government policies, profit, etc are ex-rayed with far reaching decisions taken or new policy directions made.

Filing of tax returns is one very important duty that individuals and corporate organizations should take very seriously. It is one very important indicator considered to have both positive and negative implications on the legal, financial and corporate status of such individual or corporate organizations.

Filing of returns, amongst others, is a constitutional responsibility of every citizen enshrined in Section 24 Sub-section (f) of the 1999 constitution of the Federal Republic of Nigeria as amended. It says: “It shall be the duty of that citizen to… “declare his or her income honestly to appropriate and lawful agencies and pay his or her tax promptly.”

The responsibility and process of carrying out this constitutional obligation rests both on the taxpayer and the tax authority.

While a taxpayer is obligated under the law to file tax returns with or without notice to the relevant tax authority, the tax authority likewise is duty bound to facilitate the process of filing such tax returns by providing tax entities (corporate bodies and individuals) with standardized forms, guidelines and procedures.

The Personal Income Tax Act (PITA) 2004 as amended, specifies the type of returns, the nature of information required, as well as the frequency and manner in which the returns should be filed.

To this extent, the tax authority needs to make every taxpayer more responsible under the law by constantly reminding and enlightening them in order to meet with the demands of the tax law.

The filing of tax returns for various taxes with the tax authority, is a legal obligation that must be fulfilled by every taxable entity be it individual or corporate.

For the purpose of enlightening readers, “filing” is the submission of tax returns by a taxpayer to the relevant tax authority, in a manner prescribed by law and in accordance with the laid down administrative procedure.

On the other hand, “tax returns” is a report, prepared by a taxpayer, containing information on his tax affairs, in a given period, for the purpose of complying with tax laws.

Section 81(2), 41(1) and (3) of the Personal Income Tax Act (PITA) 2004 as amended, mandates every taxable entity without notice, to file their tax returns at the beginning of every year, between January 1st to March 31st with respect to PAYE and Direct Assessment.

All self-employed persons or taxpayers, carrying on a personal business, trade, profession or vocation, is required to file returns with the tax authority nearest to him or her. In this case, the Edo State Internal Revenue Service Office, within ninety (90) days beginning from 1st January to 31st March. It is also important to note that the income of the taxpayer is taxed on a preceding year basis. In other words, the due date for filing tax returns for direct assessment, is on or before 31st March yearly.

The Personal income tax returns contains a duly completed self-assessment form, duly completed Income tax Form A, statement of full disclosure of income earned in the preceding year from all sources; particulars of income, reliefs, deductions and allowances the taxpayer is entitled to; declaration/attestation of the correctness and completeness of returns by the taxable person and evidence of payment of tax.

Another very important tax returns that must be filed by a taxpayer under the Personal Income Tax Act, is the returns filed by individuals in paid employment be it public or private, Federal, State or Local Governments. This is done through the Pay As You Earn (PAYE) scheme.

For these individuals, the income is taxed on actual basis. This means that income earned in a year is taxed within the same year.

The contents of tax returns remain the same as under self-employed individuals except that the taxpayer is required to declare;

• Income other than employment income earned from all sources in the preceding year and
• Income earned from employment in the current year.

Under the PAYE scheme, employers of labour are required to account for personal income tax deducted from the employment income of their employees by way of a return filed with the tax authority on a monthly basis.

PAYE deductions must be submitted for each month on or before the 10th day of the succeeding month to which the tax deductions relate, using the appropriate schedule.

Employers are also required to file annual returns in respect of PAYE deductions made from their respective employees’ income in the past year at the beginning of each year between January 1st to 31st.

The contents of Pay-As-You-Earn annual returns are:

1. Completed Form A (Income Tax Form for Returns of Income and claims for allowances and relief)
2. Form H1 (Annual Income declaration)
3. A schedule of tax deduction from the employer containing the following information:
• Name of employer
• Taxpayer Identification Number (TIN) of employer
• Names of employees
• Taxpayer Identification Number (TIN) of employees
• Total emolument for each employee
• Consolidated relief
• Tax deducted
• Overall total tax charged and remitted
4. Evidence of payment of tax

Non-compliance with the provisions of the Personal Income Tax Act, to filing of tax returns by any individual or corporate organization, having a public or private status, comes with sanctions in fines of N50, 000 for individual employer of labour and N500, 000 for corporate bodies respectively.

It is not all about sanctions. Early filing of tax returns within prescribed period, attracts an incentive of 1% discount.

Filing tax returns, by all taxable entities within set time, promotes good business reputation, shareholders confidence, shows commitment in doing business the right way, demonstrates financial/accounting expertise, makes entities more legally responsible and most importantly, drastically reduces civil and criminal litigations, needless fines, penalties and expenditure.

Courage Eboigbe, ANIPR is the Head, Corporate Communications Unit,
Edo State Internal Revenue Service.