FIRS TO NGOS: ‘YOU ARE NOT EXEMPTED FROM TAX OBLIGATIONS’

The Federal Inland Revenue Service (FIRS), has said that the nation’s tax laws did not exempt Non-Governmental Organisations (NGOs), from fulfilling their tax obligations.

This was stated at a sensitisation programme on Tax Obligations of NGOs in Nigeria, organised by the Service in Abuja.

At the programme, it was stated that the assumption that NGOs were exempted from paying taxes was incorrect and that Nigerian tax laws had not necessarily exempt them from paying all forms of taxes.

It was clarified that the tax laws recognise NGOs as basically not-for-profit entities, which are therefore exempted from paying income tax.

However,  where an NGO engaged in activities from which it derived profit, it would be required to pay taxes on such profits, like any other profit-making entity.

Asides income taxes, NGOs were not exempted from paying taxes such as Value Added Tax (VAT) and Personal Income Tax from salaries and allowances paid to their employees.

It was further disclosed that the service had centralised all NGOs tax issues within its Medium Tax Office (MTO) to enable it identify and monitor them for tax purposes.

The Coordinating Director, Field Operations Group, Mr Ajayi Bamidele said that the government was aware of the strategic roles of the NGOs in the area of socio economic development.

Bamidele, who was represented by the Director, Government Business Tax Department of FIRS, Mr. Femi Faniyi, said that NGOs were granted “some, not total” exemptions from tax obligations.

“Please note my choices of words, NGOs are granted some not total exemptions from tax obligations as some NGOs erroneously belief. So NGOs have some obligations under the tax laws and these obligations are mandatory,’’ he said.

Ajibola Aderonke is an auditor at professional services firm Ernst & Young (EY). She previously worked another Big 4 accounting firm PwC. She can be reached at ajibolaaderonke@gmail.com for ideas and suggestions. The post above and its ensuing comments, if any, is purely the opinion of the writer.