Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Financial Literacy Career tips

JTB is going after this pension provision that is commonly used to avoid tax

Deloitte by Deloitte
August 26, 2017
in Career tips, MSME
Avoid paying taxes, Nigeria generates N416.01 billion from Company Income Tax in Q3 2020

Government taxes on your revenue Source: Nairametrics File

Share on FacebookShare on TwitterShare on Linkedin

RelatedPosts

Joint Tax Board to go after political office holders evading tax

Pension: FG announces plans to liquidate outstanding arrears for defunct agencies

The Joint Tax Board (JTB) recently issued a public notice (the Notice) on the perceived abuse of voluntary pension contribution (VPC) scheme by employees as a means of avoiding personal income tax.

This Notice is intended to address the seeming ambiguity created by Section 10(4) of the Pension Reforms Act 2014 (PRA or the Act).

Section 10(4) of the PRA appears to leave room for varying interpretations by stakeholders and creates tax planning opportunity for taxpayers.

The Section states that “without prejudice to the provision of subsection 2 of this Section, any income earned on any voluntary contribution made under Section 4(3) of this Act shall be subject to tax at the point of withdrawal where the withdrawal is made before the end of 5 years from the date of the voluntary contribution was made”.

Consequently, some taxpayers make tax-deductible VPC to their retirement savings account (RSA) and subsequently withdraw same from the RSA without accounting for tax.

The JTB intends to discourage this practice by ensuring that taxpayers who withdraw their VPC from their RSA before retirement account for appropriate taxes. This is premised on the following:

News continues after this ad


  • This practice by taxpayers would be treated as artificial transactions in line with the provisions of Section 17 of Personal Income Tax Act (PITA).
  • Early and unregulated withdrawals will be considered to fall outside the tax exemptions granted by Section 10(3) of the PRA, which exempts amounts payable as “retirement benefits”.

The above implies that the relevant tax authorities may direct that tax is accounted for when withdrawals are made from RSA.  This Notice did not specify how the applicable tax (if any) is to be collected.  We are however aware that Lagos State Internal Revenue Service has issued a public notice on how it intends to enforce compliance in this regard.

We would continue to monitor developments in this space and provide updates as soon as they become available.  You may refer to Deloitte InsideTax article for information on the tax impact of VPC.

News continues after this ad


Related

Tags: ExplainersJoint Tax BoardPensionvoluntary pension contribution

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

inq
avatrade
Stanbic bank
Mega Millions
UBN
Hot forex
Access Bank
Bankers Committee
First bank






    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • 24 Hours Power Supply: Ikeja Electric Sign Tripartite Agreement with Enaro Energy and Ayobo Community
    • Seplat debunks alleged impropriety in securing ministerial consent to acquire Mobil Nigeria
    • Oando Holds Successful 43rd AGM: All Resolutions Passed

    Follow us on social media:

    Recent News

    24 Hours Power Supply: Ikeja Electric Sign Tripartite Agreement with Enaro Energy and Ayobo Community

    24 Hours Power Supply: Ikeja Electric Sign Tripartite Agreement with Enaro Energy and Ayobo Community

    August 10, 2022
    Seplat Energy Chief Executive Officer, Seplat Energy Plc, Roger Brown

    Seplat debunks alleged impropriety in securing ministerial consent to acquire Mobil Nigeria

    August 10, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com