It is important to be aware of the possibility of a tax audit by the Federal Inland Revenue Service (FIRS). A tax audit is an examination of a company’s financial records to ensure compliance with tax laws and regulations. Here are some things business owners need to know about tax audits in Nigeria:
- Tax audits are random: The FIRS selects companies for audit based on a risk assessment process, which considers factors such as the company’s size, industry, and compliance history. However, audits can also be triggered by suspicious or irregular tax filings.
- Audits can cover multiple years: A tax audit can cover a single tax year or multiple years, depending on the FIRS’s assessment of the company’s compliance history and risk profile.
- Records must be kept for at least 6 years: Business owners in Nigeria are required to keep all financial records and documentation for at least 6 years. This includes tax returns, receipts, invoices, and other relevant documents.
- Penalties can be imposed for non-compliance: If the FIRS finds that a company has underpaid its taxes or failed to comply with tax laws and regulations, it can impose penalties and interest on the amount owed. The penalties can be significant and can include fines, interest charges, and even criminal prosecution in some cases.
- Professional assistance may be necessary: Tax audits can be complex and time-consuming, so it may be necessary to hire a professional tax consultant or accountant to assist with the process. They can help ensure that all required documentation is in order and that the company is in compliance with all applicable tax laws and regulations.
Overall, business owners in Nigeria should be proactive about tax compliance and keeping accurate financial records to minimize the risk of a tax audit. If an audit does occur, it is important to cooperate fully with the FIRS and seek professional assistance to ensure that the issues are resolved professionally. For any assistance you might require on tax filing or tax audit issues with Lagos Internal Revenue Service (LIRS) or Federal Inland Revenue Service (FIRS), don’t hesitate to contact us.
To contact us, call +234-802-4768-668 or +234-815-5554-892.
You can also send an email to info@otnconsultinglimited.com