If you are in business, whether you are just starting or already in business, you don't want to get into trouble with the tax officials. However, there are lots of businesses who are already in such trouble and do not know the way out. The tax officials may not come to you when you are still a very small business, but when you become a big brand, they will come after you. And the penalty then will be worse than you can imagine. So, the earlier you deal with the tax issues, the better. This post will guide you in the right direction.
Published June 10th. 2020
“Show
me the denarius [ancient Roman silver coin]. Whose name and inscription is
this?” They replied saying, “it is Caesar Augustus Tiberius.” Then He said “give to Caesar what belongs to
Caesar.” This is a critical conversation that transpired between the greatest controversial
human right activist ever live and the Jewish teachers of the law in Rome.
Although the citizens of Judaea rioted, several times, based on the taxes
imposed on them by the emperor of Rome, such taxes were necessary. One of the taxes
was the poll tax instituted after the census was taken when the human right
activist was a child. The poll tax also known as head tax was a very important
source of revenue for the Roman Empire.
The
same way taxes were relevant sources of income in the days of Caesar, so it is
in your country today. Although in developed countries, there is a dynamic
system designed to assist tax payers and track down tax evaders, in less
developed countries, it is still an ongoing project. However, as a business
owner, you and your business don’t want to be caught evading tax.
Understanding
the tax agencies, its regulations and unpublicized laws governing business
operation in your country is very important. You will ignore such at your own
peril. As a business owner, whether you have been in business or just getting
started, find the agencies that are responsible for taxes in your country. And
make sure you find out the best possible way you can deal with them to avoid
breaking some laws that may hinder the progress of your business. In Nigeria,
the agencies responsible are the Federal Inland Revenue Service (FIRS) and
State Inland Revenue Service. So, if you are just starting, walk into their
offices in your locality to understand what you need to do.
If
you can’t summon the courage to walk into their offices because of the negative
things you have heard about them, you can get yourself a business lawyer, an
accountant or consultant to educate you on the procedure and how to deal with
the tax agencies. But if you have been running your business and have been
evading tax, then you need to know how to deal with this tax agencies because
they won’t go away and they do not need court order to seize your
properties—inventory, desks and bank accounts—and also padlock your office
door. Meaning, they can shut down your business.
How
do you know you are indebted to these agencies? If you have registered your
business for some years and you have not paid any tax or file in returns,
whether your business is exempted or not, then you are indebted them. You have
what we call accumulated penalty that may affect your business in the future
when it becomes a big brand. It is like sitting on a time bomb waiting to
explode when you least expect it. To prevent them from invading your business
space in the future, here is what you need to do.
Firstly,
get yourself an accountant, business consultant or lawyer who is skillful in
tax matters. You need such to explain the process to you and also negotiate on
your behalf if need be. Through your hired professional, you may need to get in
touch with the tax agencies.
Secondly,
you will need to provide them with your financial information, which obviously
they will request for. Although, you don’t have to tell a white lie to a tax
officer, full disclosure of your finances and assets is also not a good idea.
However, note that you are not legally required to disclose anything about your
financial status to any of their officers unless you are formally summoned.
Thirdly,
ask for reduced and suitable payment plan. The threat of the tax agencies can
be worse than their actions (they are very slow to act), but it is important
that you show your cooperation; ask for reduced and suitable payment plan that
will be convenient for you and your business. However, if the case is the extreme,
you should consider the last option, which is to file for bankruptcy. Although
the process is quite lengthy, it can reduce or totally wipe off your tax debts.
Whatever you are doing to deal with the tax agencies, make sure you have a hired
professional guiding you through the processes.
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