The chairman of the Enugu State Internal Revenue Service (ENSIRS), Emmanuel Nnamani, says Nigeria’s new tax law has wide-ranging incentives and allowable deductions designed to benefit businesses and boost compliance.

Mr Nnamani said this on Friday in Enugu while sensitising members of the South-East business community on the opportunities embedded in the revised tax framework.

The event was organised by the ENSIRS in collaboration with the Chartered Institute of Taxation of Nigeria (CITN).

Mr Nnamani said that many businesses often complain that the tax system was burdensome but noted that a closer reading of the law revealed provisions that significantly reduced taxable income.

According to him, companies were permitted to cover certain expenses for their executives and staff, including accommodation, utilities, domestic services and other benefits as allowable deductions.

“If we structure our companies very well, the company should take over major payments such as accommodation, utilities and other benefits.

“These are allowable deductions under the tax law,” he said.

The ESIRS boss explained that while such benefits were taxable in the hands of the employee, the law capped the taxable benefit-in-kind at not more than 20 per cent of the employee’s salary.

“For instance, if an employee earns N10 million annually and the company provides accommodation valued at N20 million, the law evaluates the benefit in kind.

“The company will not tax more than 20 per cent of the salary; even where the value is higher, the taxable portion is limited,” Mr Nnamani said.

He called on business owners to seek professional advice and study the law to take advantage of its incentives rather than complain about high taxes.

Mr Nnamani highlighted other reliefs to include donation allowances of up to 10 per cent of profit, research and development incentives, and capital allowances on qualifying assets.

The chairman advised businesses to channel donations through recognised and structured institutions to ensure they qualified for tax deductions.

He stressed the importance of proper registration and compliance, noting that companies were required to obtain a Tax Identification Number (TIN), file annual returns, and remit employee taxes promptly.

He said that company income tax returns must be filed within six months after the end of the financial year, while employers were expected to remit Pay-As-You-Earn (PAYE) deductions monthly.

He encouraged businesses to take advantage of government-backed fiscalisation and digitalisation initiatives aimed at supporting enterprises, including tools to assist with accounting, payroll management and tax remittances.

“Do not see tax practitioners as an unnecessary cost.

“They help you structure your business in a tax-efficient way while you focus on growth,” he advised.

Mr Nnamani emphasised that tax authorities were implementing statutory provisions enacted at the national level and urged taxpayers to object formally to any assessment they considered inaccurate rather than evade compliance.

He reaffirmed the commitment of the ENSIRS to continue the sensitisation programmes to improve voluntary compliance and foster a more business-friendly tax environment. 

(NAN)