Dear Zainab,

Please help me,

I registered a company since 2008 but never used it until now when I see a need to get into business.

I went to get tax registration documentation and Vat letter etc – At that point I found out my TIN# was located in a different place from my company address. At location A I was told I needed to do a redirection to appropriate MSTO. I was also informed that due to the nature of my business I am exempted from paying any taxes.

I commenced the redirection and went to the appropriate MSTO. At the new MSTO, I was informed that I was supposed to have registered for tax clearance at least 6months after registering the company even though I had not started using the company all these years.

I was supposed to be submitting tax clearance monthly etc. AT the end when the officer calculated what was due me to pay it came to over N400k. I screamed that am just about to go into business and did not have even that funds for the business yet and now he is asking for such a huge figure.

At the end, he asked me what I could pay and I said 20k. So I paid. I feel upset because, at the first MSTO, I was told I was exempted but at 2nd MSTO I was told I was in default and liable and had to appeal for a lesser charge.

Please tell me where am wrong. Was I wrong to have succumbed and paid that 20k?? I went to the 1st MSTO because of redirection delays. I told them what happened and I was told that it was wrong for them to have charged me at all. Please, what is going on in this country? How can a citizen know their right and stand by it? I paid the 20k at the bank into a government account with GTB.

Please could you clarify???

law-abiding citizen

 

Dear law-abiding citizen,

Both MSTOs are actually right.

Even when a business is yet to commence business or is tax-exempt, the business is expected to register with the FIRS within 6 months of getting incorporated and begin filing zero VAT returns annually and zero tax returns annually. Failure to do so results in being penalized and the exact penalty will depend on when your business was registered

Failure to register for VAT, within the specified time attracts a penalty of N10,000 within the first month and N5,000 for each subsequent month the failure persists. I’m not sure when your business was registered so cannot say for sure how many penalties you were to pay. However, the FIRS is at liberty to waive or reduce fines.

If you paid into a government bank account, you probably paid legitimate fees so you should have no worries about,

I’m glad to hear you have resolved it now. Please remember to file your zero VAT returns monthly.

Thanks once again for reaching us

Zainab