The Federal Inland Revenue Service, FIRS, has urged all Civil Society Organisations (CSOs) to register for tax purposes and obtain Taxpayer Identification Number (TIN).
This was disclosed by Mr Temitayo Orebajo, FIRS’ Director of Tax Policy and Advisory Department, in a webinar on Thursday in Abuja, on tax responsibilities for CSOs, according to the News Agency of Nigeria.
The webinar was organised by the FIRS and the European Union Agents for Citizen-Driven Transformation (EU-ACT), a Non-Governmental Organisation, to educate and engage CSO on matters of tax regulations that concern them.
What the FIRS Director is saying
The FIRS Director stated that all CSOs are required to have accurate records of employees and proper books of accounts for tax purposes, citing that failure to do so will attract penalties. However, VAT on goods purchased by NGOs for humanitarian projects were taxed at zero rate.
“The NGO itself is not exempted from VAT where the organisation procures contracts or purchases goods that are not directly used in humanitarian donor-funded projects.
“Likewise, any service procured or consumed by NGO is liable to VAT, except where such service is exempted under the VATN Act.
“NGOs are required under the Pay As You Earn (PAYE) obligation to deduct tax at source from salaries and other emoluments of the employees, directors, officers among others,” he said.
He also stated that the obligations under the Companies Income Tax Act (CITA) in section 25 of CITA provides tax relief to any company making donations to an organization listed under the fifth schedule to CITA. He added that donations must be made out of its profits for the year of assessment and total donation shall not exceed 10 per cent of the total profits of the company for the said year of assessment.
“Donation is not of capital nature, except where the donations are made to universities or other tertiary or research institutions and should not exceed 15 per cent of total profits or 25 per cent of tax payable.
“NGOs requiring to be listed under the fifth schedule to CITA may apply to the Minister of Finance through FIRS,’’ Orebajo said.