🥁 Final Series in WHT 🥁
If you are just joining us on the first time, please read through the previous post on this topic, so that you would have a better understanding.
a. How is WHT beneficial to my business?
WHT is an advance payment of your income tax like we defined earlier, therefore if at the end of a financial year your tax payable is N500,000.00 and an aggregate of all your WHT credit note is N200,000.00, the net tax you will pay to the government will be N300,000.00. That is why it is important to keep your WHT Note(s).
What are WHT credit notes?
This is the document issued by the Tax Authority showing that a taxpayer has suffered tax deduction at source.
How to Remit WHT.
So, if you deduct taxes from your suppliers/service provider's invoice you must file returns at the end of any given month. All you do, is draw up a schedule detailing the list of companies you deducted taxes from, their addresses, the value of the invoices, the tax deducted and the rate, Your name and address as the tax payer and the relevant tax authority .
You then go to the bank to remit the money and collect an e-receipt.
After obtaining receipt of payments, you now take to the relevant tax authority attached to your schedule, so you can be handed the WHT credit notes on behalf of your clients.
You should keep a file for all the WHT Credit note you receive on behalf of your clients for easy accessibility.
Who Are The Relevant Tax Authority?
The relevant tax authority is either the State or the Federal Government. The State Government collects WHT from Individuals or Sole Traders/Business Name Owners under the Personal Income Tax Act. The Federal Inland Revenue collects tax on behalf of the Federal Government under the Company Income Tax Act.
Caveat: Don’t hesitate to contact us with your tax matters should you need any assistance. This series serves as a guide for business owners to understand their tax implications.
_@accounting_plus we don't only provide solutions to your accounting and tax matters, we also care about your business growth.
Our contact information is in our bio.
We wish you an awesome week! ✨✨