Understand the New Tax Law Before It Affects Your Business.
Adapted from a message
by
Ado Mohammed Abubakar, FCA, FCTI
Are you ready for the new tax law that will start applying in less than forty-five (45) days?
Even though the government has not done enough to raise public awareness and has focused more on a small segment of taxpayers, we must remember one thing: ignorance of the law will never be an excuse before the authorities.
It is now essential for our business professionals to engage with experts to understand these new rules and avoid falling into the hands of rogue tax officials when the laws fully take effect.
A lot of what we hear at the neighbourhood tea joint about the new tax law is simply not true. It is a proper understanding of the law that will help us separate facts from rumours.
Let us be clear on a few points:
1. There is no tax on your capital, trading stock, or money simply sitting in your bank account.
2. Tax is on profit/income only.
3. We are the ones to calculate our own business results, determine our profit, and compute how much tax we ought to pay to the government on that profit โ this is called self-assessment.
4. Government will only come after us if the information it gathers suggests that there is doubt or inconsistency in the returns we filed.
5. Accurate records and proper documentation will be our protection in the event of any audit or investigation.
6. The law allows certain deductions and reliefs to be taken out of profit before tax is charged.
7. There are serious penalties and sanctions for those who fail to comply with these new provisions.
To protect yourself and your business, you need to improve the way you manage your financial affairs by:
1. Keeping proper and accurate records of all money coming in and going out of your business.
2. Keeping every document that supports your income and expenses (receipts, invoices, bank statements, contracts, etc.).
3. Filing your returns and paying your taxes to the relevant tax authorities within the time limits set by law.
4. Consulting qualified professionals to advise you on legitimate ways to reduce your tax liability and benefit from available incentives.
We must understand that these new laws contain several incentives designed to reduce the real burden of tax โ but only those who know and understand them will benefit.
May God grant us success..