Importance of Good Tax System for Your Company

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Importance of Good Tax System for Your Company

Table of Contents

This is the same as requirements, characteristics, procedures of good tax system for your business. As tax consultants we want to look at those things you must do in your business to have a good tax system. Broadly speaking, this is called tax management. It is a coherent all inclusive tax administration for your business that manages what tax, amount of tax obligation, reason for the tax, how much tax due and when. All of these entails that you manage your tax system properly to pay adequate and sufficient tax as at when due avoiding any form of penalty or tax litigations. Importance of Good Tax System for Your Company details how you will manage your business tax.

Importance of Good Tax System for Your Company – Purpose of Taxation:

The Primary Purpose of Taxation is to generate fund by which governments finance their expenditure. Tax therefore, is the imposition of financial charges on citizens and corporate entities. Therefrom, the government accumulates funds for the functioning of the government machineries. So, it becomes obligatory as a legal entity by the relevant tax laws to pay one form of tax or the other to the government. In Nigeria, there are those taxes by the federal, state and local governments.

RELEVANT TAX LAWS IN NIGERIA:

The following are the existing tax legislation in Nigeria, as amended:

Associated Gas Re-Injection Act
Capital Gains Tax Act
Companies Income Tax Act
Deep Offshore and Inland Basin Production Sharing Contracts Act
Tertiary Education Trust Fund Act
Federal Inland Revenue Service (Establishment) Act
Income Tax (Authorised Communications) Act
Industrial Inspectorate Act
National Information Technology Development Act
Nigerian Export Processing Zones Act
Industrial Development (Income Tax Relief) Act
Nigeria LNG (Fiscal Incentive Guarantees and Assurances) Act
Oil and Gas Export Free Zones Act
Personal Income Tax Act
Petroleum Profits Tax Act
Value Added Tax Act
Stamp Duties Act
Taxes and Levies (Approved List for Collection) Act
Casino Act

Importance of Good Tax System for Your Company

As Tax Consultants, Complete Full Marks Consultants Limited will ensure that your tax is managed to enable you achieve your business objectives. Our tax management team will give you the best tax service deliver at minimal cost. All the above listed Tax laws re being administered efficiently by our tax expert team. So, we will have you realise the Importance of Good Tax System for Your Company.

Importance of Good Tax System for Your Company – What You Must Know:

Tax Planning:

This tax strategy is typically employed to help your business achieve her financial and business goals. As a matter of fact, there re benefits of tax planning for both large and small businesses. In fact, tax planning plays an important role in lowering the amount of taxable income. In certain cases, reducing the tax rate.

Up-to-date Annual Tax Returns:

In fact, filing tax returns annually is really important. Every business must file their respective taxes to government at both central and state level of all the branches of your business. Many tax payers always forget this. But if you are in contact with us, we will always remind you.

Which Tax to Pay:

This is another aspect for tax management. The taxes payables may differ from business to business. In this connection, the tax sovereignty matters too. Therefore, tax payment may depend upon the locality, niche and size of the business, nationality and other details.

Since most business people re really busy with their business activities, taxes can sometimes be ignored or forgotten. This may be harmful for your business. Failure in tax payment on time can lead to penalties, additional fees and court proceedings. YES! We will not allow you get into this trap.

Knowledge of Tax Laws:

Different levels of the government has different tax rules. Therefore, it’s important you understand the taxation rules and regulations of a particular tax authority. No matter the type or level of your business, this is important. So, be it a small business, home-based workers or online businessman, you need to understand the relevant tax laws that regulate your business operations. Therefore, if you don’t want to face legal consequences, you better get to learn about the tax system of your area and be updated with its filing processes as well. However, we can take this problem off your shoulder if you contract us to manage your business/company tax.

Business Legal Structure:

Another thing is that you have to do your best to choose a correct legal structure for your business right from onset. This is another important thing you must do to manage your business tax very well. If you have this knowledge, then you will know that your business is different from your personal effects. Even if you have more than one business going on together under one roof, please know that they are different entities. Therefore, don’t mismatch their fund or pay in personal monies into your company accounts, unless there are proper documentations for them.

Again, know then that limited liability companies pay company income tax, oil exploration companies pay Petroleum Profit tax, mining companies pay company income tax, while business names tradings don’t pay tax on its name. The proprietor pays the tax associated with such businesses/ names.

Importance of Good Tax System for Your Company – FRIS/SIRS Documentations:

If you have the understanding as explained in the last paragraph, then you know what processes to undergo to dully register and document your tax status. After this you have to learn to keep every document related with your taxes intact and secured. In this connection, prepare documents for every tax related actions taken so that you can monitor and take proper actions in time.

Penalties:

This arises when you fail to file in your tax returns. Then leads to failure of payment of taxes. You have to know that this penalty is as much as five percent of the tax that is unpaid for each month in which your tax return was delayed. There is also an associated interest at current commercial rate at the time of the late payment.

In addition, legal procedures may also be instituted if there are reasons for that. This could be as a result of back duty assessments, tax audit or tax investigation. When you get into any of these situations, you will then understand why you shall have called on us earlier.

Therefore, the tax enforcement actions by any tax authority could lead to:

Close of your office/business premises for a while
File court order to claim parts of your property.
Seize your business property
It can also make you forfeit your refunds

Importance of Good Tax System for Your Company – Ask Us:

This is the next thing to do. You have to call us for expert advice. As professionals, we give the best advice on this matter. Ask us how to get your TIN, Tax clearance certificates and others. Ask us too how to register your business at CAC and make your annual returns. You also need to know from us about auditing your business account and generating your financial statements. So, ask us again, what happens when you don’t pay your taxes on time.

Honestly, Complete Full Marks Consultants Limited is out to assist. For your Accounting, Auditing, Taxation and Management services, contact us on +234 8034347851 or email us via [email protected].

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OTHERS ARE:

It’s our duty to define your business with a road map, indicating your destination with a bankable business plan that suites your level of operations. So, make your orders on any of the business plan topics today. Thank you.

Ane

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.