Format of the final returns
The same format as above but with the exclusion of the description estimated is prescribed for the final return. The final return is required to be submitted with respect to the same accounting period “within five months after the expiration of that period”. The final accounts should contain a declaration, which shall be signed by a duly authorised officer of the company.
Penalty for non-filing of annual returns
N10,000 at the first instance, and N2000 for everyday the failure to submit continues.
Upstream companies
The upstream companies are obliged to file tax returns and pay companies income tax on profits arising from their gas operations at the CITA rate which is currently 30%. They are also required as agent to deduct and remit withholding tax at applicable rates from contracts awarded.
Value Added Tax returns – Oil and Gas companies
Prior to 2007, companies in this sector were not charging the VAT. With the inclusion of Section 10A (2) in the Value Added Tax (Amendment) Act, 2007, all oil and gas companies whether in upstream or downstream are obliged to charge VAT at source and remit same to the FIRS effective from September 2007. In effect, such companies are made the agents of collection, thus, they are to file VAT returns.
Education Tax returns for companies operating in oil exploration and production.
Companies operating in the oil exploration and production are to file education returns in addition to the other returns earlier stated in preceding paragraphs.
Education tax is an annual charge on assessable profits of all companies registered in Nigeria irrespective of the sector or industry. The rate of tax is 2 percent. The tax is an allowable expenditure only for companies operating in the oil exploration and production.
Capital Gains Tax returns for oil companies
Oil companies, just as companies treated under the CITA, are obliged to pay capital gains tax at the rate of 10 percent on any gains arising from disposal of their assets such as plant and machinery, land and building, goodwill, secret processes. Capital gains tax returns are filed along the PPTA returns.
Filing of tax returns by companies engaged in the solid minerals activity.
READ ALSO: After decade of revenue mishits, Nigeria faces record budget deficit in 2020
The Nigerian Minerals and Mining Act 1999 No. 34, now Cap. M 12 LFN 2004 is the primary legislation regulating mining in Nigeria and it “provides for the control of and property in minerals”. This Act replaced the 1946 Act. Essentially profits from solid minerals are taxed under the CITA. In addition to hydrocarbon, thereare over thirty different solid minerals in Nigeria. They include barites, bitumen, coal, gold and iron ore, etc
Two laws, the CITA Cap C 21 LFN 2004 (as amended) and the Minerals and Mining Act provided fiscal terms for the taxation of solid minerals. While the profits from solid minerals are taxed under the CITA, the Mining and Minerals Act merely provides for tax reliefs as it has no charging provision. Although tax holidays of three years and another two years extension to be granted by the Minister are available, the companies are expected to file tax returns according to the provisions of the CITA. CITA provides for only three years tax holiday.
Section 22 (I) and (ii) of the Mineral and Mining Act Cap. M12 L.F.N. 2004 provides as follows:
22. (1) The tax relief period of a company granted a mining lease under this Act shall commence on the date of operation and subject to the provisions of this Actor any other relevant financial enactment, the tax relief shall continue for three years.
2. The tax relief period of a company granted a mining lease under this Act may, by the end of the three years, be extended by the Minister for one further period of two years.
Teju Somorin
