By Olumide Solate
Computing taxes can be so cumbersome, especially for the tax types that do not consider any deduction or relief; such tax types include the Value Added Tax (VAT) which is currently 5% of the total sum and the Withholding Tax (WHT) whose rate depends on the particular transaction in question and is also applied to the total sum.
Other tax types which consider certain deductions and reliefs for the benefit of the taxpayers usually require some measure of technical expertise in their computation, especially in the identification of the deductions and reliefs allowed.
Conscious of this fact, the Federal Inland Revenue Service (FIRS) incorporated a tax calculator application in its redesigned website to help users compute their taxes and at least have an idea of the amount of taxes they should pay, based on their income.
The tax calculator is one of the best features on the redesigned FIRS website. This will help taxpayers have an estimated idea of their tax assessment before they file their returns at the nearest FIRS office or via the e-filing platforms. It is designed to take care of computations for both individual (PAYE and Personal Income Tax) and corporate (Company Income Tax) taxpayers.
The corporate section takes cognisance of the type of industry the company operates in, the statutory deductions allowed by the Company Income Tax Act, the applicable capital allowance and unrelieved losses as well as the number of years the company has been in operation. If all the required fields have been correctly filled, a hit on the ‘CALCULATE TAX’ generates the Company Income Tax, corresponding Education Tax and the Information Technology Development Levy (where applicable).
The individual/enterprise section caters for persons in paid employment, partnership businesses and those that are self-employed. This section makes provisions for both earned (from paid employment) and unearned (other income such as rents, royalties etc.) income. It also considers the statutory deductions allowed in the Personal Income Tax Act (PITA) such as the National Housing Fund contribution and the pension contribution as well as the statutory consolidated relief allowance. After filling all the required fields, a hit on the ‘CALCULATE TAX’ button gives the tax payable broken into monthly instalments.
The Tax Calculator is specifically designed to make life easier for all classes of taxpayers. If you ever experience any page loading issue while using the platform, please refresh your page.