Introduction

Taxation of individuals in employment in Nigeria is operated through the Pay-As-You-Earn (PAYE) scheme. Sections 81 and 82 of the Personal Income Tax Act Cap P8 LFN 2004 require employer of labor to file the following tax returns.

Employers’ Annual Declaration

Employers of labor are required to file employees tax returns by completing the prescribed form (Employers’ Annual Declaration Form H1). The tax returns by a company should contain the following information and documents:

  • Names of all employees that work with the organization.
  • Total salary and allowances paid to each employee.
  • Total taxes deducted from each employee.
  • Total taxes remitted to the relevant authority (PAYE Receipts).
  • Total contribution made by employees to Pension Fund (Evidence of pension paid to PFAs).
  • Total contribution made by any employee to National Housing Fund (NHF).
  • Total contribution made by any employee as Health Insurance (NHIS).

Employees’ Returns for Income and Claims for

Allowances and Reliefs

Every employee is expected to complete prescribed Income Tax Form for Return of Income and Claims for Allowances and Reliefs (Form A). An employee is required to furnish the tax authority with following information and documents.

  • Names and Address of employee
  • Details of Children (less than 18 years) – full names, date of birth, name of their school, savings made for each child.
  • Current Residential Address
  • Employment Income – current year salary. Employment Income – all allowances and benefits to be received from employer during year.
  • Life Assurance Policy (Premium paid in immediate preceding year).
  • Employment Income – all allowances and benefits to be received fromemployer during year.
  • Life Assurance Policy (Premium paid in immediate preceding year).

Due Date for Filing

Employers of labor are expected to file Employers’ Annual Declaration (Form H1) and Employees’ Returns for Income and Claims for Allowances and Reliefs (Forms A) with the employees’ relevant tax authority by 31st January every year.

Employer’s Liability

Employers of labor would be liable to the following penalties for non-compliance with employee’s annual tax returns requirements. The offence and penalties are:

  • Failure to Employees” Annual Returns within the due date. On conviction, limited liability companies shall be fine N500,000 while business names and enterprises shall be fine N50,000.
  • Filing False Returns. On conviction, limited liability companies shall be fine N500,000 while business names and enterprises shall be fine N50,000 or imprisonment for not more than six.

For more information’s please send us a mail: info@midaspage.com

to download pdf file click on the link below.

PDF: Employees’ Taxes: Filing Annual Tax Return

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