Proshare Logo
   Market Date: 19-09-2014   
Agriculture All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted OTC MARKET World of Business

The Personal Income Tax (PIT) Act, 2011

Category: Taxation


  Read (4169)
The Personal Income Tax (PIT) Act, 2011

Friday, February 03, 2012 6:08 AM
 

 

The first major amendment to the income tax law since 1979.was signed into law in December 2011 by President Goodluck Jonathan.

 

Download the ACT here.

 

No fewer than 41 clauses, including amendments to Cap.P8 LFN, 2004, 36 sections, First Schedule, Third Schedule, Sixth Schedule and Short Title of the old PITA law were reviewed.

The new act would provide more disposable income to the lower income earners following the amendment of the income tax table and adjustments in the applicable income tax incremental bands, which brings it in line with current income levels.
 

The Act also simplified the compliance processes by consolidating the reliefs and allowances stipulated in the Act and lowering the burden on low income earners as well as widening the tax base by bringing in a huge number of potential taxpayers, especially in the informal sector, into the tax net
 

The act also removes obsolete, unrealistic and outdated reliefs and allowances associated with the former Act, replacing the previous reliefs and allowances with enhanced consolidated reliefs and allowances
 

Principally, section (5), sub-section (1) of the Act states, “There shall be allowed a consolidated relief allowance of N200, 000 subject to a minimum of 1 percent of Gross Income or whichever is higher plus 20 percent of the Gross Income and the balance shall be taxable in accordance with the Income table in the Sixth Schedule to this Act.’
 

The Schedule provided tax exemption on National Housing Fund (NHF) contributions, National Health Insurance Scheme, Life Assurance Premium, National Pension Scheme and Gratuities.
 

Sub-section (3) of the Schedule provided a graduated tax rate of Gross Income or whichever is higher on First N300, 000 at seven percent, Next N300, 000 at 11 percent, the next 500, 000 at 15 percent, next 500, 000 at 19 percent, Next N1.600, 000 at 21 percent and above N3.200, 000 at24 percent.
 

The new Act supports the use of taxation as a tool for income redistribution and wealth creation by imposing lower tax burden on low income earners and higher tax burden on the higher income earners.
 

The Act also supports government’s intention to implement a shift in focus from direct to indirect taxation, by lowering the overall income tax burden so that there is more disposable income in the economy, leading to higher value added tax collection and higher economic activity amongst others.
 

Under the new Act, it is now obligatory for government agencies, professional bodies, and trade associations to provide information to tax authority that would assist them in the performance of their duties.
 

The Act also provides greater leverage to the Minister of Finance, Tax Authorities and the Accountant General of the Federation in administering the law, including the power to deduct at source from its budgetary allocation, unremitted taxes due from Ministry, Departments and Agencies (MDAs) and transfer such deduction to the relevant State upon request by state.
 

In a way, the act professionalized the appointment of Chairmen for the State Internal Revenue Service. This is because such appointments are now subject to the confirmation by the State Houses of Assembly and three members representing a Senatorial District in the state as contained in section (30) (a) of the Act.
 

Tax authorities are empowered to enforce payment of taxes due from taxable persons that has been properly served with an assessment notice as specified by the law.
 

In particular, Section 104, sub-section 1 (a) and (b) states that: ``the relevant tax authority may in the prescribed form, for the purpose of enforcing payment of due, distrain the taxpayer by his goods, other chattels, bond or other securities.
 

“Distrain upon any land, premises or places in respect of which the taxpayer is the owner and subject to the provisions of this section, recover the amount of tax due by sale of anything so distrained.’’

 

Download the ACT here.

 

 



Tags: , 



Comment With Your Facebook or Yahoo! ID


Latest news


News on Taxation

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Newsletter
Contact Us
Message from CEO
Resources

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
WebTV
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

#1minNews
News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Newsletters
Discussion Forum
Policy

Subscriber Agreement
Privacy Policy
Data Policy
Disclaimer
Copyright Policy
Trademarks
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Training
Legal Support Services
Web/Technology Services
File a Complaint