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NGOs not exempted from taxation – FIRS

By on October 18, 2014

The acting Executive Chairman of Federal Inland Revenue Service (FIRS), Alhaji Kabiru Marshi, Thursday clarified that contrary to widespread assumptions, Non-Governmental Organisations (NGOs) are, to some extent, not exempted from tax obligations

Speaking at the opening of a sensitisation seminar for members of the NGOs in Abuja, he said the belief that NGOs are exempted from paying income taxes because they are “not-for-profit” entities was erroneous, adding that where an NGO engages in activities from which it derives profit, “it will be required to pay taxes on such profits, like any other profit-making entity.

Represented by Coordinating Director, Modernisation Group, Mr. Ossy Chuke, Mashi said: “Nigerian tax laws do not necessarily exempt NGOs from paying taxes.

He added that NGOs “are not exempt from paying taxes such as Value Added Tax (VAT) on goods and services. They are also required to deduct and pay over personal income tax from salaries and allowances paid to their employees, among others.

Marshi also said going forward, a more detailed presentation would be made on the tax obligations of NGOs to enhance greater clarity on the part of tax payers, tax officers, tax professionals and of course NGO operators.

He said the deliberations were expected to provide information on what types of entities constitute NGOs, so that the FIRS could make clear files that are to be transferred to the Medium Tax Office (MTO).

Mashi said the Nigerian economy “is moving away from resource dependence and focusing more on sustainable sources of revenue especially taxation, we cannot therefore afford to leave behind any taxpayer segment, neither can any group of taxpayers seek to exempt itself from contributing to the development of Nigeria through paying taxes, except as permitted by law.”

The acting FIRS boss also said the service had now centralised all NGO tax issues within its Medium Tax Office (MTO) in Abuja to enable them better identify and monitor NGOs for tax purposes, improve its turn-around time on NGO issues and provide bespoke services to them.

However, Coordinating Director, Field Operations of  FIRS, Mr. Ajayi Bamidele, said though NGOs are traditionally granted some tax exemptions because of their supportive roles in  thesociety as they undertake shared responsibility with government for social and developmental needs, NGOs still have some mandatory obligations under the tax laws.

He therefore stressed the need to improve awareness of NGOs to their tax responsibilities.

 

[This Day]