Often, people have different questions related to taxes. Therefore, it is pertinent to provide authoritative answers to their many questions. It is why we have compiled a list of the most asked questions and answered them accordingly. 

What happens if a taxpayer’s payment is sent to the wrong tax authority?

This can only happen if the taxpayer does not have a TIN or if the TIN registered by the counter clerk does not exist or belongs to another taxpayer. If the system administrator is properly informed, the tax authority or the payment in question will be reclassified. 

If the taxpayer does not exist in the database, the registrar will create one, and the system will issue a valid TIN. Otherwise, if the TIN was inadvertently submitted to the wrong tax authority, it may be sent to the proper tax authority.

How does FIRS prevent multiple receipts from being issued for the same payment?

Thanks to automated receipts and credit notes, duplicate receipts are no longer issued.

If a taxpayer deposits a cheque at his bank office instead of going to the bank, how can he be sure that the payment has been credited to his FIRS account?

The taxpayer should ensure that the bank has provided an electronic ticket showing the date and time the payment was credited to the FIRS account.

Can I get TCC in Abuja if I live in Kaduna and pay taxes there?

No, you can only get it from the tax office where you are registered and have paid your taxes. This is in accordance with the Tax Law.

Are taxes deducted from medical allowances?

Yes, Withholding Tax (WHT) must be deducted at source if the payment is made directly to the hospital, and PAYE tax must be paid if it is given to the employee as a benefit.

Can the taxpayer pay the tax at any branch of a tax bank?

Yes, no bank branch is specifically designated for the tax or type of tax. All banks authorized to collect taxes can collect taxes for all tax services and types.

How can I reclaim a tax paid in error in the depositor’s name instead of the taxpayer’s?

Any tax paid in error can be refunded by the collecting bank if notified within 24 hours. However, if the error was not discovered in time, FIRS can issue a refund through an online payment platform, which you can use to pay less tax in the future.

Why does it take more than two weeks for a TCC to be issued if the tax is paid in cash?

The TCC can only be issued after the taxpayer has paid all taxes for the previous three years, and the law always requires the TCC to be issued within two weeks. However, the two-week period begins only when the taxpayer has paid all taxes and has filed a TCC with the tax office, not when the tax is paid to the bank.

Why is a TCC application denied after two weeks while still undergoing processing?

TCC may be denied for the following reasons:

• If tax has not been paid.
• If penalties or interest have not been paid.
• if the TCC has not filed a corporate tax return
• a tax investigation, audit, or inquiry has not been completed, or
• is pending in the Tax Appeal Tribunal (TAT), and the tax has not been paid as required. 

Is it true that taxpayers who have filed self-assessment tax returns can no longer pay in installments?

No, the Tax Law still allows self-employed taxpayers to pay in installments. However, this is only possible if the taxpayer makes a request to the tax authorities.

Why does the FIRS refuse to issue a TCC even after deducting the payment from the employee’s salary?

The FIRS does not prevent a person who has paid all taxes from obtaining a TCC. However, if the taxpayer still owes money, the application for a TCC will be denied.

What is meant by tax avoidance and tax evasion?

Tax avoidance is defined as finding loopholes in the tax law and using them to reduce the amount of tax owed.

Tax evasion occurs when a taxpayer deliberately commits an illegal act to avoid paying the correct taxes.

What is accounting period and accounting year?

An accounting period is a period in which the financial statements of a company or organization are prepared.

An accounting year is the period used to prepare a company’s financial statements.

Do contractors’ proposals have to include a Tax Identification Number (TIN)?

Yes, it’s mandatory.

What is due date?

The due date is the legal deadline by which a taxpayer must file and pay income tax. The Tax Law provides different deadlines for different types of taxes.