Fiscal policy committee chair warns of widespread non-compliance, says employers and employees alike are required to file
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said that all taxpayers in Nigeria are required to file their annual tax returns by March 31 each year, irrespective of their income level or whether Pay As You Earn (PAYE) tax has already been deducted from their salaries.
PAYE is an income tax system under which employers deduct taxes directly from employees’ salaries and remit them to the government.
Oyedele made the clarification during a recent webinar organised in collaboration with the Joint Revenue Board (JRB). The virtual session, which brought together human resource managers, payroll officers, chief financial officers and tax managers, was later posted on his YouTube channel on Friday.
Speaking at the event, Oyedele explained that employers are legally required to file annual tax returns on behalf of their employees. This, he said, includes submitting projections of staff remuneration for the year.
“In terms of filing returns, you need to file annual returns as employers for your employees. Many of you must have done that already,” he said.
“If you haven’t, you have just a couple of days left to file those returns, including projections of how much you will pay your staff.”
According to him, compliance with this requirement has remained very low across the country.
“This is one area where we have been non-compliant in Nigeria. In many states, more than 90 percent, even the most sophisticated states, cannot boast of 5 percent filing returns,” Oyedele stated.
He also rejected the widespread assumption that employees whose PAYE taxes have been deducted are exempt from filing personal income tax returns.
The fiscal policy expert stressed that under both the old and new tax laws, the obligation to file returns applies to all taxpayers, including low-income earners.
“Many people assume that if they are an employee and the employer has deducted PAYE, they don’t have to do anything. That is wrong,” he said.
“Both under the old and new tax laws, you must still file your returns.”
Oyedele added that tax authorities, including the Joint Revenue Board and state internal revenue services, are working to simplify the process to encourage compliance.
“I’m sure the tax authorities, joint revenue boards, and various state internal revenue services are working on how to make this process simpler and easier,” he said.
“All of us must file our returns, including those earning low income. You must file returns by 31st March of the year in respect of the previous fiscal year.”
On the new tax law, Oyedele further noted that businesses benefiting from tax incentives are now required to disclose such incentives when filing their tax returns or shortly after.
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