Under the Personal Income Tax (Amendment) Act 2011, we have two types of annual payroll tax returns. First, the annual employer tax return (Form H1) which shows the annual income and taxes of all employees in a company. More information on Form H1 is here. Second, we have the Income Tax Form for Return of Income and Claims for Allowances and Reliefs or Form A. We shall address six (6) Frequently Asked Questions (FAQs) on Form A return.
What is an Income Tax Form for Return of Income and Claims for Allowances and Reliefs?
It is an individual tax return that shows the income earned from all sources in the prior year. Income from all sources includes profits, salaries, gains, income, benefits-in-kind, pension, dividends, interest and rent. Also, it discloses the statutory contributions such as pension, life assurance premium. The tax authority will then use this information to estimate the taxable income, tax reliefs and Pay-As-You-Earn (PAYE) tax of a taxable person.
Who should file?
This return is expected to be filed by all individuals including self-employed persons, local employees and expatriate employees. An employer shall file a Form A return on behalf of all employees while taxes are paid through the Pay-As-You-Earn (PAYE) tax. Self-employed individuals can submit their tax returns by way of direct assessments.
Is anyone exempt from filing?
Individuals who earn N30,000 or less in a year are exempted from filing this return.
Where is an Income Tax Form A filed?
This return is filed with the relevant Internal Revenue Service where a taxpayer is tax-resident. Each state in Nigeria has its own Internal Revenue Service.
How do I file Income Tax Form A?
It depends on the mode of submission of the relevant internal revenue service. Some tax authorities allow submission of hard copy forms. Please visit the nearest tax station of the relevant internal revenue service to obtain a copy. Tax authorities, like Lagos State Internal Service and Rivers State Internal Revenue Service, allow taxpayers to file this tax return electronically via an online portal. Delta State Internal Revenue Service also has an online resource for resident taxpayers via https://deltabir.com/en/index.
When is the due date for filing an Income Tax Form A return?
The deadline for submission is 31 March of every year. For instance, the return due by 31 March 2020 contains the income for the 2019 fiscal year (January to December).
In conclusion, many employers who pay taxes of its employees under the PAYE system rarely file Form A return. The same applies to individuals who have suffered withholding tax at source on rent, dividend, and interest. However, it is a legal requirement for every taxable individual to file annual returns even if there is no additional tax payable. The Nigerian tax authorities may decide to enforce compliance with Form A return in the coming years.
Updated: 17 March 2020