Frequently asked questions and answers on general tax administration
Question 1 What happens when a taxpayer`s payment is posted to a wrong tax office?
Answer: This can only be possible if the taxpayer does not have a TIN or the bank`s branch teller entered a wrong TIN which is either for another taxpayer or the TIN does not even exist. The system administrator, if informed officially, will reclassify the tax office or such payment. In cases where the taxpayer does not exist in the database, the registration officer will create the taxpayer and the system will generate a valid TIN for the taxpayer. Also, in cases where the TIN was wrongly assigned to a tax office, the TIN can be redirected to the correct office.
Question 2 How does FIRS prevent issuance of multiple receipts for same payment?
Answer: The automated receipts and credit notes issuance will eliminate issuance of multiple receipts.
Question 3 If a taxpayer gives a cheque to a bank in his office without going to the bank, how can the taxpayer know whether payment has been made to FIRS account?
Answer: The taxpayer should insist on the bank delivering the e-ticket to him which will indicate the date and time payment was captured into FIRS account by the bank.
Question 4 If someone lives in Kaduna and pays his tax there, can he obtain his TCC in Abuja ?
Answer: No, one can only obtain his/her TCC from the Tax Authority where the person is registered for tax purposes and has been paying his taxes in compliance with the rule of residence as contained in the tax law.
Question 5 Is medical allowance taxed?
Answer: Yes. If it is paid directly to the hospital, Withholding Tax (WHT) should be deducted and if it is given to an employee in the form of allowance, it is taxed under PAYE.
Question 6 Can a taxpayer pay to any collecting bank branch?
Answer: Yes. There are no designated bank branches for any tax offices or tax types. All approved Lead/Collecting banks can collect for all offices and tax types.
Question 7 What is the process involved in getting back tax payment erroneously credited in the name of the depositor instead of the taxpayer?
Answer: Any tax paid in error can be reversed by the collecting bank within 24 hours if the bank is put on notice within the period. However, if the error was not detected on time, refund can be made by FIRS on request through e-payment platform with the option to use it to set-off future tax.
Question 8 Why does it take more than two weeks to issue TCC even if the taxpayer pays tax in cash?
Answer: TCC can only be issued only after all taxes payable by the taxpayer for the past three preceding years have been paid. The statutory standard of issuing TCC within two weeks is still in force. However, the two weeks start to count only after all taxes have been paid and from the day the taxpayer files application for TCC with the Tax office and not from the date of payment of taxes to the Banks.
Question 9 On what basis will an application for TCC be rejected after two weeks and still be under processing?
Answer : TCC can be rejected on the following grounds:
a. Where taxes have not been paid
ii Where penalties or interest is still outstanding
iii. Where outstanding returns have not been filed
iv. Where there are outstanding issues arising from tax queries, audit or investigation.
v. Where the case is with the Tax Appeal Tribunal (TAT) for hearing and part of the tax has not been paid as required
TCC once rejected cannot be said to be still under processing, but it is kept on hold until issues outstanding have been resolved or sorted out by the taxpayer with the relevant office.
Question 10 Is installment Payment no longer allowed for self-assessment filers?
Answer: The tax law still recognizes the granting of installment payment to self-assessment filers. However, this can only be granted on application by the taxpayer to the tax office.
Question 11 Why does FIRS still refuse to issue TCC after PAYE has been deducted from the staff salary?
Answer: FIRS does not deny issuance of TCC to any taxpayer who has paid his tax liability in full. However, TCC request is rejected where the taxpayer still has outstanding liability to pay.
Question 12 What is Tax avoidance and Tax evasion?
Answer: Tax Avoidance: – This is considered as a way of identifying the loop hole in the tax law and then taking advantage of such loop hole to reduce the tax payable
Tax Evasion: – This is a deliberate and illegal act of the taxpayer not to pay the correct tax
Question 13 What is Accounting year and Accounting period?
Answer: Accounting Year:- This is a twelve (12) months period over which an entity`s financial accounts are made-up.
Accounting Period:- This simply means the period with reference to which financial accounts of an entity are prepared.
Question 14 Is inclusion of Taxpayer Identification Number (TIN) on a Contractor’s quotation necessary?
Answer: Yes it is mandatory.
Question 15 What is the meaning of due date?
Answer: Due date is the date prescribed by law for filing of tax returns and making of tax payments by taxpayers. All tax types have their different due dates as provided by the relevant tax laws.
• Due dates for other tax types are as shown below: