This is even better. As a business owner, you get to pay all manner of government levies and annual fees just because you have a business. I see a lot of small businesses not coping because of the high cost of doing business. It is being too harsh on these businesses.
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Do your government charge self employed individuals operating on small scale business tax??
- Thread starter Sincerem
- Start date
This is even better. As a business owner, you get to pay all manner of government levies and annual fees just because you have a business. I see a lot of small businesses not coping because of the high cost of doing business. It is being too harsh on these businesses.
Definitely, all business pay tax. While the big businesses pay tax directly and indirectly, small business do it indirectly. Tax force wouldn't go around chasing small business owners. Small business pay them through goods purchased.
[automerge]1612361065[/automerge]
Definitely, all business pay tax. While the big businesses pay tax directly and indirectly, small business do it indirectly. Tax force wouldn't go around chasing small business owners. Small business pay them through goods purchased.
[automerge]1612361065[/automerge]
Definitely, all business pay tax. While the big businesses pay tax directly and indirectly, small business do it indirectly. Tax force wouldn't go around chasing small business owners. Small business pay them through goods purchased.
In my country government do not charges individuals operating on a small scale business
Owners of small business like koist sell on their store everyday and they don't pay tax
All they do is to take care of the environment where they have their little business
Owners of small business like koist sell on their store everyday and they don't pay tax
All they do is to take care of the environment where they have their little business
WhiteHouse
Captain Junkie
Everybody be it a government worker or you are self employed pay tax, even if you are not employed or have any business you will still pay tax one way or the other, and I think that's common in most countries, what differs is how much of tax each pays.
The government do charge small scale businesses in my country. If the government claim that they don't, you will see their local government tauts around claiming they are from the local government authority.
Pauljonnes1000
Addicted member
Everyone in Nigeria pay tax via two means, some directly like bank payment, some indirectly through VAT. The truth is that everyone pay here in Nigeria.
Miracles04
Recognized member
major source of revenue for the governments around the world is Tax. It is no surprise why governments are keen about the safety and productivity of their citizens, as this translates to more taxable persons. The same applies to companies and businesses, because the more the businesses, the higher the source of revenue for the government.
On the other hand, especially in a situation like Nigeria where people perceive the government is not upholding its obligations; citizens do not enjoy paying taxes. It is always hard to just give your hard earned money away to a government; well maybe you have a point.
The truth however is that paying taxes is not an issue of morality that can be done by choice, rather it is a compulsory legal obligation, failure to remit taxes attracts severe penalties. So, whether the government is useful or not, taxes have to be paid by all taxable persons or businesses.
For you not to be found guilty in the eye of the law, below are some popular and must pay taxes that apply to almost all businesses in Nigeria, except those enjoying tax holidays or businesses that fall into the tax exemption category.
COMPANY INCOME TAX:
This tax, as the name suggest apply to companies, and it is calculated on the profit of the company. Now we know that profit in its most simplistic meaning is expenses subtracted from income. This is why it is said that revenue isn’t the same thing as profit, it is important for every business to know the difference. However for the purpose of taxes, there is taxable income, because to the taxman, it is not every expense that is acceptable. The rate of a company’s income tax is fixed at 30% of taxable income (a major quality of taxes, they are always fixed at a certain rate or percentage).
This Tax is remitted to the Federal Inland Revenue Service, and it is payable on a preceding year basis. It is very important that business owners secure the help of an accountant to help prepare accounting books so as to have a clear picture of the tax liability for each year, or whatever accounting period used by the company.
Companies in the oil and gas field do not pay Company Income Tax, rather they pay Petroluem Profit Tax
EDUCATION TAX:
For those who attended Federal Universities or institutions in recent years, (no not you from the first republic). Those of this generation will be familiar with many buildings in these institutions having inscription such as ‘Education Trust Fund 2009’. This fund is made available to the Federal government by the companies, and no, it is not a voluntary contribution. It is fixed at 2% of the assessable income; you can see this isn’t taxable income. The tax man has a way of arriving at different profits, so you should also always seek tax advice.
VALUE ADDED TAX (VAT):
arguably the most popular tax in Nigeria. This tax is paid irrespective of whether you are a company or an individual. This tax is placed on goods and services; the burden of the tax is borne by the final consumer. The way this tax works is such that, for every good sold, or service rendered, it is compulsory to add a VAT at the rate of 5% of sale price. So for example if a good is being sold for N 200, with VAT added it would be eventually sold for N 210. The VAT of N 10 cannot be calculated as a profit to the seller or its business, but would be recorded as VAT to be remitted to the FIRS. VAT is paid by the final consumer, collected by the seller, and remitted to the FIRS. A failure to include VAT, or not declare it is an offense that attracts serious fines and severe punishments.
VAT filing is monthly, and always due on the 21st day of the subsequent month.
There are however some goods that are exempt from VAT, an example is educational materials like books.
You may require an expert to guide you on how to balance VAT output and VAT input for your business, as these determine your final VAT liability.
WITHHOLDING TAX:
A withholding Tax is not a tax you pay, it is just another type of tax you help the tax man secure. This type of tax like the name suggests is withheld by the person paying for a service to the service provider. For example, if Mr A provides a service to Mr B, Mr B pays Mr A his money less 10% of the agreed sum. Mr B remits that 10% to the FIRS, and Mr A gets a credit note as a receipt to show that he has paid part of his tax liability for the year, and a total of the Tax withheld shall be deducted from his payable tax for that year.
It is a means of ensuring that people pay taxes, so it is an advance form of tax payment.
PAY AS YOU EARN (P.A.Y.E):
this is a scheme by the Taxman to ensure that employees pay their taxes, and puts the duty on the employer to deduct the tax liability of the employees at source, thus the employees are paid their net salary, The employer on monthly basis remits the tax to the State’s Internal Revenue Service, a tax clearance for that month covers all employees of the company.
The PAYE becomes applicable to a business or company with 4 or more employees.
CAPITAL GAIN TAX:
This is not an everyday Tax, it is payable by companies or individuals. This is a tax paid on the sale of an asset. CGT is always fixed at 10% on the profit of the sale. Emphasis on profit, not sale price, so it is important that you learn how to calculate a CGT or employ the service of a person who can guide you.
PERSONAL INCOME TAX:
This tax is payable by individuals or unincorporated businesses. Therefore this type of tax applies to employees, traders, sole proprietors, partners in a partnership, and businesses not registered as companies. It is calculated by what is regarded as direct assessment, and like the company income tax, the tax man allows for some reliefs, but not all expenses, so it is always important to approach a tax expert in computing your tax liabilities.
On the other hand, especially in a situation like Nigeria where people perceive the government is not upholding its obligations; citizens do not enjoy paying taxes. It is always hard to just give your hard earned money away to a government; well maybe you have a point.
The truth however is that paying taxes is not an issue of morality that can be done by choice, rather it is a compulsory legal obligation, failure to remit taxes attracts severe penalties. So, whether the government is useful or not, taxes have to be paid by all taxable persons or businesses.
For you not to be found guilty in the eye of the law, below are some popular and must pay taxes that apply to almost all businesses in Nigeria, except those enjoying tax holidays or businesses that fall into the tax exemption category.
COMPANY INCOME TAX:
This tax, as the name suggest apply to companies, and it is calculated on the profit of the company. Now we know that profit in its most simplistic meaning is expenses subtracted from income. This is why it is said that revenue isn’t the same thing as profit, it is important for every business to know the difference. However for the purpose of taxes, there is taxable income, because to the taxman, it is not every expense that is acceptable. The rate of a company’s income tax is fixed at 30% of taxable income (a major quality of taxes, they are always fixed at a certain rate or percentage).
This Tax is remitted to the Federal Inland Revenue Service, and it is payable on a preceding year basis. It is very important that business owners secure the help of an accountant to help prepare accounting books so as to have a clear picture of the tax liability for each year, or whatever accounting period used by the company.
Companies in the oil and gas field do not pay Company Income Tax, rather they pay Petroluem Profit Tax
EDUCATION TAX:
For those who attended Federal Universities or institutions in recent years, (no not you from the first republic). Those of this generation will be familiar with many buildings in these institutions having inscription such as ‘Education Trust Fund 2009’. This fund is made available to the Federal government by the companies, and no, it is not a voluntary contribution. It is fixed at 2% of the assessable income; you can see this isn’t taxable income. The tax man has a way of arriving at different profits, so you should also always seek tax advice.
VALUE ADDED TAX (VAT):
arguably the most popular tax in Nigeria. This tax is paid irrespective of whether you are a company or an individual. This tax is placed on goods and services; the burden of the tax is borne by the final consumer. The way this tax works is such that, for every good sold, or service rendered, it is compulsory to add a VAT at the rate of 5% of sale price. So for example if a good is being sold for N 200, with VAT added it would be eventually sold for N 210. The VAT of N 10 cannot be calculated as a profit to the seller or its business, but would be recorded as VAT to be remitted to the FIRS. VAT is paid by the final consumer, collected by the seller, and remitted to the FIRS. A failure to include VAT, or not declare it is an offense that attracts serious fines and severe punishments.
VAT filing is monthly, and always due on the 21st day of the subsequent month.
There are however some goods that are exempt from VAT, an example is educational materials like books.
You may require an expert to guide you on how to balance VAT output and VAT input for your business, as these determine your final VAT liability.
WITHHOLDING TAX:
A withholding Tax is not a tax you pay, it is just another type of tax you help the tax man secure. This type of tax like the name suggests is withheld by the person paying for a service to the service provider. For example, if Mr A provides a service to Mr B, Mr B pays Mr A his money less 10% of the agreed sum. Mr B remits that 10% to the FIRS, and Mr A gets a credit note as a receipt to show that he has paid part of his tax liability for the year, and a total of the Tax withheld shall be deducted from his payable tax for that year.
It is a means of ensuring that people pay taxes, so it is an advance form of tax payment.
PAY AS YOU EARN (P.A.Y.E):
this is a scheme by the Taxman to ensure that employees pay their taxes, and puts the duty on the employer to deduct the tax liability of the employees at source, thus the employees are paid their net salary, The employer on monthly basis remits the tax to the State’s Internal Revenue Service, a tax clearance for that month covers all employees of the company.
The PAYE becomes applicable to a business or company with 4 or more employees.
CAPITAL GAIN TAX:
This is not an everyday Tax, it is payable by companies or individuals. This is a tax paid on the sale of an asset. CGT is always fixed at 10% on the profit of the sale. Emphasis on profit, not sale price, so it is important that you learn how to calculate a CGT or employ the service of a person who can guide you.
PERSONAL INCOME TAX:
This tax is payable by individuals or unincorporated businesses. Therefore this type of tax applies to employees, traders, sole proprietors, partners in a partnership, and businesses not registered as companies. It is calculated by what is regarded as direct assessment, and like the company income tax, the tax man allows for some reliefs, but not all expenses, so it is always important to approach a tax expert in computing your tax liabilities.
I think in my country there is no extra and direct tax on small scale business. While govt also provide opportunities for low scale business. I think it should be developed in every country.
Provided your business is registered, be it small or big, you are entitled to tax payments even if it is paid personally and not on the business. All unpaid taxes may accumulate to cause issues in the future for the business.
I own an individual micro-enterprise and the only duty I have in Brazil are to pay the affordable monthly fee to social security (60 reais, that would be now 12 dollars at the current exchange rate) to grant pension (I'll receive individual micro-entrepreneur pension if I carry on my micro-enterprise for at least 18 years long) and to present the yearly tax return. It's not at all a heavy charge.
I don't think so, tax are calculated based on a company's income after all his allowances had been deducted. And I think there are limits to how taxes are calculated. Small scale businesses profits are minimal and I don't think it is taxable
Bart Simpson
Noobie
In my country, we are prompted to pay taxes on business in addition to being a tax and fee in my opinion. (This is an example of a specific input.) Smallbusinesses, shouldn't be taxed to the point where their businesses are forced to shut down and they lose all their assets. As it stands, we can no longer question the government decision.
No, government do not charge tax on small scale business. From my previous experience and researching, I have discovered that government of any country only include tax charge to government workers. Usually deducted from their salaries.
MercySmith
Loyal member
The tax system in Nigeria is not so serious. Especially with smaller business. Most business or firm in Nigeria hardly pay any tax. Though with the system of Nigeria government, I will say it is a good thing.
In my own country I don't think the government is charging anything on small scall business because am a living witness.i have registered my business name as far 2017 and since have been operating noone ever come for any tax. Even there is palliative money that my government is giving registered business I still benefit from it.
Tariq Nazir
Loyal member
In my country the small business operating in the local community they pay levy as been directed by the local authority.most small business don't pay tax in my country. I think that aspect of tax is not that serious for small business and this can be an advantage to the small business success.
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