Tax Amnesty: Three Important Stages in Personal Income Tax Compliance

The first is the filling of annual return using  Form A as approved by the Joint Tax Board.

These form is made of five parts. Part A is to elicit tax payers personal information like name, mailing address and so on. The most significant part is the part B, on income disclosure.There are other parts: ‘C’ for the disclosure of fringe benefits. Fringe benefits are non monetary sweeters to higher level officials ,  it include official cars, residential apartments solely paid for by the employer They are taxable in the hand of the beneficiaries at the 5% rateable or market value. 

Part C, is rarely invoked as you can see in the payslip of a top government official (below), no disclosure! Parts D & E are schedules for immovable property and capital allowance claim, both are taken care of in the balance sheet. While part F are supporting documents for Pension and insurance schemes.

One of the quality of a good taxation is that it must be fairly determinable. Therefore a slice rates of graduating tax rate is always included in the form.  We’ll use a publicly available payslip to demonstrate the personal income  tax computation (continue from the Form A, Part B above).

As it shows the amount of total tax payable is N671, 429.97 divided by 12 calender months gives N55,952.50 which perfectly reconcile with his payslip (see below):

In conclusion the level of tax compliance in any country and Nigeria will have a direct relationship with equally a high level of transparency and accountability and not a high level government dependence on taxes in absence of, and or depletion of other natural resources. To that extent the VAIDS- Voluntary Assets and Income Declaration Scheme or Nine months window of Tax Amnesty can yield positive results.

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