Preview CITN prep

Nigerian taxation divides first by LEVEL OF GOVERNMENT and only then by type. The Federal Government levies companies income tax, value added tax, the tertiary education tax, customs and excise duties, stamp duty on instruments between companies, and the personal income tax of members of the armed forces, police, civil service of the federation and residents of the FCT. States levy personal income tax on everyone else — which is why an employee's PAYE goes to a State Internal Revenue Service and not to the Federal Inland Revenue Service. Local governments collect fees and rates on their own statutory base. Getting this allocation right is worth marks in every CITN paper, because it decides which office you file in, whose assessment you object to and whose tribunal hearing you attend. Second division: DIRECT taxes, borne by the person on whom they are levied and shifting only with difficulty (companies income tax, personal income tax, capital gains tax), versus INDIRECT taxes on expenditure and transactions (VAT, excise, customs, import duty), which are collected from one person and paid for by another. Stamp duties attach to DOCUMENTS, not to income. Withholding tax is not a separate tax but a MECHANISM for collecting an advance of someone's income tax at the point the income arises. The law is layered, and the layering is examinable. The Principal Acts — Companies Income Tax Act, Personal Income Tax Act, Value Added Tax Act, Capital Gains Tax Act, Stamp Duties Act, the Capital Allowance Act, the Federal Inland Revenue Service (Establishment) Act and the Control of Tax Practitioners Act — carry the permanent rules. A Finance Act then amends several of them in one statute, and it is the reason a computation must be run with the rates and reliefs for the correct YEAR OF ASSESSMENT. The year of assessment for individuals is the calendar year itself; for companies it is normally the twelve months of the accounting period ending in that year — so a company whose accounts close 31 March 2026 is assessed for the 2026 year of assessment on profit for that period. Procedure then decides most practitioner arguments. Registration is by Tax Identification Number; returns are filed within the statutory deadline (for companies, six months after the end of the accounting period, and the first return within eighteen months of commencing business); payment of the assessed amount follows the filing. Where an authority forms the view that a return is wrong, it raises an AMENDED OR ADDITIONAL ASSESSMENT, which the taxpayer must object to in writing within thirty days with the grounds and amount in dispute stated — a vague objection is a lost objection. The taxpayer then has a choice: pay the disputed tax and press the objection, or apply for consent to withhold payment on giving security. Refusal to pay undisputed tax, or failure to file, is what converts a technical dispute into penalties and interest.

YEAR OF ASSESSMENT (YOA): the period for which tax is charged — the calendar year for individuals; normally the accounting period for companies. BASIS PERIOD: the profits on which a year of assessment is charged. SELF-ASSESSMENT: the taxpayer computes, files and pays; the authority verifies by audit. AMENDED / ADDITIONAL ASSESSMENT: the authority's revised charge after examination of a return. TAX APPEAL TRIBUNAL: the statutory first forum for tax disputes, above the Federal Inland Revenue Service and below the Federal High Court. PRACTISING LICENSE: the CITN authorisation a tax consultant needs to prepare and sign computations and act before a tax authority.