• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/12/2013

Nigeria - Installment payments vs. lump-sum payment of tax 

August 12: Nigeria’s tax authority—the Federal Inland Revenue Service—in a 2013 newspaper article focused on the requirements for companies to file returns and settle their income tax obligations, and the rules for making tax remittances in installments.

In the article, the tax authority explained how companies are to settle their tax liabilities in installments and noted the applicable penalty regime.

The article basically reports that a company that intends to settle its corporate income tax liability with installment payments is required to begin paying the tax due in the relevant year of assessment, and in such a manner so that the final installment is made not later than the due date for filing the income tax return.

KPMG observation

Tax professionals in Nigeria have observed that the tax authority’s position with respect to installment payments of tax (as explained in the article) appears to be inconsistent with provisions of Nigeria’s income tax law.

It has been observed that companies that intend to settle their income tax liability in a lump-sum payment can follow the rules provided in Nigeria’s income tax law for settling tax liabilities—i.e., rules that allow a tax payment within two months from the due date of filing of the assessment—and that how a company decides to resolve and settle its tax liability lies solely with each company’s management.

Read a July 2013 report [PDF 160 KB] prepared by the KPMG member firm in Nigeria: Newsflash on Federal Inland Revenue Service’s Publication on the Filing of 2013 Tax Returns

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