NGOs must pay tax — FIRS The Federal Inland Revenue Service, FIRS, has commenced a fresh push for Non-Governmental Organisation s, NGOs, which would include religious bodies to pay tax. The Acting Executive Chairman, EC, of the service, Alh. Kabir Mashi, told NGOs operators at a sensitization meeting in Abuja, yesterday, that the nation’s tax laws did not exempt them from paying tax, absolutely. Alh. Mashi who was represented by the Coordinating Director of Modernisation, Mr. Osy Chuke, explained that the only tax from which such organizations were exempted was Income Tax but that if they got involved in activities that yielded profit, taxes had to be paid to the federal government from such profits and that personal income taxes of their staff had to be paid to the government. “Nigerian tax laws do not necessarily exempt NGOs from paying taxes. Rather they recognise NGOs as basically no-for-profit entities, which are therefore exempted from paying Income Tax. Where, however, an NGO engages in activities from which it derives profits, then it will be required to pay taxes on such profits, like any other profit-making entity. “Also, other than income taxes, NGOs are not exempt from paying taxes suck as Value Added Tax, VAT, on goods and services. They are also required to deduct and pay over Personal Income Tax from the salaries and allowances paid to their employees, amongst others”, he said. The EC disclosed that a Medium Tax Office had been opened in Abuja to handle NGOs’ tax issues as part of the organisation’s move to create specialized offices for various taxpayer groups. In an opening address, the Coordinating Director, Field Operations Group, Mr. Ajayi Bamidele, noted that the contributions of NGOs were recognised in the society as they undertake shared responsibility with government for social and development needs of the country thereby relieving the financial burden which otherwise should have been government’s responsibility. He said that the extant tax laws provided for some tax exemptions for the NGOs in line with the recognition of their supportive roles in the society but some operators mistook the exemptions to cover all taxes which was not the case. His words, “it was found that there is little awareness about tax obligations of NGOs in Nigeriaa even where these NGOs carry out business activities. There is this erroneous belief among operators that as tax exempt organizations, they are exempted from all tax obligations, including filing of returns. “This assumption is not correct and I think this is what led to the proliferation of organizations doing business but registered as NGOs in all manners of human endeavours in Nigeria”. Payment of tax NGOs and religious bodies have been a subject of a long debate between the federal government and leaders in the sectors with the latter insisting that their outfits were not out to make profits and therefore should not be taxed. Culled from Vanguard.
Posted on: Thu, 23 Oct 2014 20:58:32 +0000
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