FIRS Extends Filing Deadline
One of the obligations of taxpayers is to file returns of their income to the relevant tax authority annually. In the case of limited liability companies, they are expected to file their Company Income Tax (CIT) returns the latest six months after the end of their accounting (financial year-end).
For example, companies with December 31 year-end are to file for Company Income Tax (CIT) Returns latest by June 30, which means all companies whose accounting year ended on December 31, 2021, are supposed to file their Company Income Tax Returns latest June 30, 2022.
Reason for the extension
The Federal Inland Revenue Service (the Service) has received numerous calls from companies for the extension of time to submit the Companies Income Tax (CIT) returns for the 2022 year of assessment (YOA) falling due on 30th June 2022 as a result of their inability to meet up with the deadline.
Consequently, as a measure of goodwill and in line with relevant provisions of the Companies Income Tax Act, the Service directs as follows:
- all companies whose CIT returns for 2022 YOA fall due between 30th June and 31st August 2022 (both days inclusive) are given up to 31st August 2022 to submit the returns to the Service;
- the extension of the due date is a one-off gesture for only 2022 YOA CIT returns which are due as aforesaid;
- the relevant CIT returns shall, therefore, not attract Late Filing Penalty or interest for late payment if submitted to the Service on or before 31st August 2022;
- where relevant CIT returns are not fled by the extended date, penalty and interest for late payment shall be computed from the original due date and not the extended date;
- this extension of the filing date is only for CIT and does not include returns for withholding tax, value-added tax, personal income tax (PAYE), etc.
The Service invites all relevant taxpayers to take the opportunity afforded by this extension to submit their CIT returns within the specified time, pay the tax due and avoid payment of penalty and interest.
What the news means for business owners
The extension is a great relief to Companies because they will not need to pay the Late Returns Penalty (LRP) of N50,000, together with a Penalty of 10 percent and Interest at the rate of 19 percent of the Company Income Tax.
The extension would also provide an avenue for those who could not raise the requisite funds to pay the Company Income Tax (CIT) on filing to start to make arrangements on how to source the funds or to start utilizing the opportunity of paying on account in bits before August 31, 2022.
So what can businesses do to take advantage of this?
Companies that are yet to file their Company Income Tax Returns should take advantage of this extension by removing whatever
In order for companies not to fall into not meeting the deadline for filing. Management of companies should know that filing Company Income Tax Returns is a statutory obligation that failure to comply has cost in terms of late return penalty, penalty, and interest attached to it. Apart from the fact that late return penalty, penalty, and interest increase the cost of compliance, it is also a dent in the competence of the management of the company.
In order to avoid a situation of not meeting the deadlines for the filing of Company Income Tax (CIT) Returns. Management of companies must ensure that the following are carried out on time
- the closing year-end account is commenced as early as possible
- prepares the accounts ready for the auditors
- invites the auditors early
- makes funds available for the company income tax returns.
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