{"id":38959,"date":"2017-06-20T16:44:03","date_gmt":"2017-06-20T16:44:03","guid":{"rendered":"http:\/\/localhost:8888\/cregital\/disha\/2017\/06\/20\/faqs-on-general-tax-issues-for-nigerian-msmes\/"},"modified":"2023-06-15T15:58:02","modified_gmt":"2023-06-15T15:58:02","slug":"faqs-on-general-tax-issues-for-nigerian-msmes","status":"publish","type":"post","link":"https:\/\/msmehub.org\/staging\/6671\/faqs-on-general-tax-issues-for-nigerian-msmes\/","title":{"rendered":"FAQs on General Tax Issues for Nigerian MSMEs"},"content":{"rendered":"

1. Why are MSMEs required to pay Tax?<\/span><\/strong><\/p>\n

MSMEs, like other taxpayers are considered as legal and economic persons and as such have to fulfil their civic duties which includes paying relevant taxes to the Government accordingly.<\/span><\/p>\n

2. What are the key Taxes applicable to MSMEs in Nigeria?<\/span><\/strong><\/p>\n

a. Personal income tax<\/a> for individuals, business names and unincorporated bodies<\/span><\/p>\n

b. Companies income tax<\/a> for limited liability companies<\/span><\/p>\n

c. Value added tax<\/span><\/p>\n

d. Withholding tax<\/a><\/span><\/p>\n

e. Capital gains tax<\/span><\/p>\n

3. Is there a special Tax rate for MSMEs?<\/span><\/strong><\/p>\n

A reduced tax rate of 20% applies to MSMEs set up as a limited liability company with less than 1 million turnover. To qualify, an MSME must be engaged in agricultural, manufacturing, wholly-exported trade and should be within the first five (5) years of operations. However, this is not seen by MSMEs as adequate. Hence, the agitation for a more beneficial, effective and dedicated tax regime.<\/span><\/p>\n

4. How can I determine appropriate Taxes and Levies that may be charged against my business?<\/span><\/strong><\/p>\n

An MSME can access and review the Taxes and Levies (Approved List for Collection) Act for a list of taxes and levies applicable to all categories of taxpayers. The provisions of this Act are considered to be too heavy for the profile of MSME operations.<\/span><\/p>\n

5. What is a Tax number?<\/span><\/strong><\/p>\n

It is a unique identifier used by the tax authorities to identify, record and track individual taxpayers within the tax net. It is commonly referred to as a \u201ctax identification number\u201d by the Federal Inland Revenue Service and “Payer ID” by the Lagos Internal Revenue <\/span>Service. Other states within Nigeria employ different nomenclatures for the tax number issued to taxpayers.<\/span><\/p>\n

6. Are MSMEs eligible for special Tax incentives\/exemptions?<\/span><\/strong><\/p>\n

MSMEs are entitled to various tax incentives available to Nigerian businesses and companies in general, provided the relevant requirements are met.<\/span><\/p>\n

7. How is Tax administration structured in Nigeria?<\/span><\/strong><\/p>\n

Tax Administration in Nigeria is three-tiered.<\/span><\/p>\n