Question Tag: Tax Assessment

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  • 15 Marks

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

Calculate the tax liabilities and deferred tax provisions for ICTREC Mining Company Limited, ensuring compliance with Nigerian tax law and addressing FIRS requirements for accurate financial reporting. The report will guide the company in meeting its tax obligations and preparing financial statements free of queries.

The Managing Director of ICTREC Mining Company Limited is concerned about the correct computation and presentation of deferred taxes in the company’s financial statements. Last year, the Federal Inland Revenue Service raised a query on the company’s financial statements and the annual tax returns filed for tax assessment purposes.

To avoid any future tax queries on the financial statements, the Managing Director has approached your firm of chartered accountants to assist in preparing financial statements suitable for presentation at the company’s annual general meeting and submission to the tax authorities for determining tax liabilities.

All relevant books of accounts for ICTREC Mining Company Limited’s financial transactions have been made available to you. The following is an extract from the accounts for the year ended December 31, 2021:

Income and Expenses (N’000):

  • Turnover: 125,400
  • Rent and Rates: 12,200
  • Direct Mining Transportation Cost: 1,190
  • Direct Mining Cost: 47,400
  • Gross Profit: 64,610
  • Dividends Income (net): 3,900
  • Interest on Foreign Deposit: 2,750
  • Total: 71,260
  • Salaries and Wages: 25,340
  • Depreciation of Mining Plant: 2,500
  • Depreciation (Other Non-Current Assets): 7,840
  • Other Administrative and General Expenses: 4,210
  • Loan Interest: 850
  • Loss on Sale of Old Mining Plant: 200
  • Net Profit: 30,320

Additional Information:

  1. Interest on foreign deposit was repatriated through the company’s domiciliary account in a Nigerian deposit money bank.
  2. Unrelieved losses amount to N2,800,000.
  3. Capital allowance agreed with tax authorities for the year was N7,250,000.
  4. Tax written down value of qualifying capital expenditure as of December 31, 2021, was N35,110,000, while net book value was N23,700,000.
  5. Opening tax written down values and net book values were N42,620,000 and N33,900,000, respectively.
  6. Unpaid tax at the beginning of the year was N15,620,000, with payments made during the year totaling N18,860,000.
  7. Depreciation rate of 10% per annum applies to the mining plant.
  8. The mining plant was revalued in 2017, with a revaluation surplus of N5 million included in the financial statements that year.

Required:

You have been directed by your Principal Partner to work on this assignment and prepare a draft report for his review. The report should show the computation of the following:

  1. Tax liabilities for the relevant year of assessment
    (7 Marks)
  2. Deferred tax provisions for 2021 and 2022
    (8 Marks)

Total: 15 Marks

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  • 15 Marks

AT – Nov 2017 – L3 – Q6 – Tax Administration and Dispute Resolution

Company on the total tax liabilities

Pategi and Abu are brothers based in Hackettstown, New Jersey, USA. In 2009, they, along with ten other African-Americans, incorporated a telecommunications company named Pategi Telecommunications Limited. The company, headquartered in the USA, has a representative office in Share, Kwara State, Nigeria. In the year ended December 31, 2014, the following transactions were extracted from the company’s records:

  1. Number of Minutes of Telecommunication Transactions:
    • U.S. to other parts of the World: 1,705,000 minutes
    • U.S. to Nigeria: 374,000 minutes
    • Nigeria to U.S.: 426,250 minutes
    • Nigeria to Canada: 550,000 minutes
    • U.S. to Canada through Nigeria: 794,750 minutes
      Total Minutes: 3,850,000 minutes
  2. Worldwide Expenses Incurred (Naira):
    • Refurbishment: N7,150,000
    • Rent: N1,100,000
    • Depreciation: N25,991,563
    • Salaries and Wages: N4,065,188
    • Other Disallowable Expenses: N9,658,000
    • Administrative Expenses: N4,820,750
      Total Expenses: N52,785,501
  3. Telecommunication Charges:
    • Average charge rate per minute: $0.50
    • Applicable exchange rate: N198 to $1.00

Required:
Advise the company on the total tax liabilities for the relevant year of assessment. (Total 15 Marks)

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  • 20 Marks

TAX – May 2023 – L2 – SA – Q3 – Tax Dispute Resolution

Explain conditions for final assessment and discuss objection and appeal procedures for tax assessments.

Taxation has been defined as the imposition of compulsory levies on individuals and entities by governments in most countries in the world. The primary objective of taxation is essentially to generate revenue or raise money for government expenditure on social welfare.

You were appointed as the accountant of Specks Nigeria Limited on August 31, 2022. Based on self-assessment, the company filed the audited financial statements for the year ended December 31, 2021, together with its tax computations on June 7, 2022, and the relevant tax liabilities were fully paid on the same date.

On August 31, 2022, the Federal Inland Revenue Service raised an assessment that was not in line with the tax returns. At the meeting of the directors held in September 2022, this issue was discussed, and you were mandated to quickly address it so that the assessment would not become final and conclusive.

Required:
a. When will an assessment become final and conclusive? (5 Marks)
b. Discuss the following in relation to objection and appeal procedures:
(i) Time limit for objection and appeal (4 Marks)
(ii) Contents of a notice of objection (4 Marks)
(iii) Amendment of assessment and notice of refusal to amend (NORA) (7 Marks)

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  • 5 Marks

TAX – Nov 2015 – L2 – Q2a – Tax Dispute Resolution

Discussing the required particulars to be included in a Notice of Appeal against an assessment pending before a Tax Appeal Tribunal.

What are the specific particulars to be included in a Notice of Appeal against an assessment pending before a Tax Appeal Tribunal?

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  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q8 – Companies Income Tax (CIT)

Identify which condition is not required for a notice of objection to be valid under Section 69 of CITA.

In line with the provision of section 69 of Companies Income Tax Act Cap C21 LFN 2004 (as amended), which of the following is NOT a condition for a notice of objection to be valid?
A. It must be in writing and addressed to the Chairman, Federal Inland Revenue Service
B. It must state the grounds of objection, for example, amount of assessable and total profits of the company for the relevant assessment year
C. It must state the tax which the taxpayer claims is payable for the year of assessment
D. It must be raised within thirty days of the date of service of the notice of assessment
E. It must be raised within sixty days of the date of service of the notice of assessment

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  • 8 Marks

PT – Nov 2019 – L2 – Q1b – Tax Administration

Describes the essential elements included in a tax assessment notice issued by the Commissioner-General.

b) The only tool for communicating a tax liability to a taxpayer is through a notice of assessment.

Required: What are the elements of a notice of tax assessment?
(8 marks)

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  • 10 Marks

PT – July 2023 – L2 – Q1c – Tax Administration

Explanation of self-assessment, pre-emptive assessment, administrative assessment, and tax audit assessment.

Explain the following as used in tax administration:
i) Self-Assessment
ii) Pre-emptive Assessment
iii) Administrative Assessment
iv) Tax Audit Assessment

(10 marks)

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  • 5 Marks

PT – Dec 2023 – L2 – Q1d – Tax Administration

Listing eight key elements contained in the Commissioner-General's notice of tax assessment.

Where the Commissioner-General makes an assessment under a tax law, the Commissioner-General shall serve a written notice of the assessment on the taxpayer.

Required:
State EIGHT (8) elements contained in Commissioner-General’s notice of tax assessment. (5 marks)

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  • 15 Marks

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

Calculate the tax liabilities and deferred tax provisions for ICTREC Mining Company Limited, ensuring compliance with Nigerian tax law and addressing FIRS requirements for accurate financial reporting. The report will guide the company in meeting its tax obligations and preparing financial statements free of queries.

The Managing Director of ICTREC Mining Company Limited is concerned about the correct computation and presentation of deferred taxes in the company’s financial statements. Last year, the Federal Inland Revenue Service raised a query on the company’s financial statements and the annual tax returns filed for tax assessment purposes.

To avoid any future tax queries on the financial statements, the Managing Director has approached your firm of chartered accountants to assist in preparing financial statements suitable for presentation at the company’s annual general meeting and submission to the tax authorities for determining tax liabilities.

All relevant books of accounts for ICTREC Mining Company Limited’s financial transactions have been made available to you. The following is an extract from the accounts for the year ended December 31, 2021:

Income and Expenses (N’000):

  • Turnover: 125,400
  • Rent and Rates: 12,200
  • Direct Mining Transportation Cost: 1,190
  • Direct Mining Cost: 47,400
  • Gross Profit: 64,610
  • Dividends Income (net): 3,900
  • Interest on Foreign Deposit: 2,750
  • Total: 71,260
  • Salaries and Wages: 25,340
  • Depreciation of Mining Plant: 2,500
  • Depreciation (Other Non-Current Assets): 7,840
  • Other Administrative and General Expenses: 4,210
  • Loan Interest: 850
  • Loss on Sale of Old Mining Plant: 200
  • Net Profit: 30,320

Additional Information:

  1. Interest on foreign deposit was repatriated through the company’s domiciliary account in a Nigerian deposit money bank.
  2. Unrelieved losses amount to N2,800,000.
  3. Capital allowance agreed with tax authorities for the year was N7,250,000.
  4. Tax written down value of qualifying capital expenditure as of December 31, 2021, was N35,110,000, while net book value was N23,700,000.
  5. Opening tax written down values and net book values were N42,620,000 and N33,900,000, respectively.
  6. Unpaid tax at the beginning of the year was N15,620,000, with payments made during the year totaling N18,860,000.
  7. Depreciation rate of 10% per annum applies to the mining plant.
  8. The mining plant was revalued in 2017, with a revaluation surplus of N5 million included in the financial statements that year.

Required:

You have been directed by your Principal Partner to work on this assignment and prepare a draft report for his review. The report should show the computation of the following:

  1. Tax liabilities for the relevant year of assessment
    (7 Marks)
  2. Deferred tax provisions for 2021 and 2022
    (8 Marks)

Total: 15 Marks

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  • 15 Marks

AT – Nov 2017 – L3 – Q6 – Tax Administration and Dispute Resolution

Company on the total tax liabilities

Pategi and Abu are brothers based in Hackettstown, New Jersey, USA. In 2009, they, along with ten other African-Americans, incorporated a telecommunications company named Pategi Telecommunications Limited. The company, headquartered in the USA, has a representative office in Share, Kwara State, Nigeria. In the year ended December 31, 2014, the following transactions were extracted from the company’s records:

  1. Number of Minutes of Telecommunication Transactions:
    • U.S. to other parts of the World: 1,705,000 minutes
    • U.S. to Nigeria: 374,000 minutes
    • Nigeria to U.S.: 426,250 minutes
    • Nigeria to Canada: 550,000 minutes
    • U.S. to Canada through Nigeria: 794,750 minutes
      Total Minutes: 3,850,000 minutes
  2. Worldwide Expenses Incurred (Naira):
    • Refurbishment: N7,150,000
    • Rent: N1,100,000
    • Depreciation: N25,991,563
    • Salaries and Wages: N4,065,188
    • Other Disallowable Expenses: N9,658,000
    • Administrative Expenses: N4,820,750
      Total Expenses: N52,785,501
  3. Telecommunication Charges:
    • Average charge rate per minute: $0.50
    • Applicable exchange rate: N198 to $1.00

Required:
Advise the company on the total tax liabilities for the relevant year of assessment. (Total 15 Marks)

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  • 20 Marks

TAX – May 2023 – L2 – SA – Q3 – Tax Dispute Resolution

Explain conditions for final assessment and discuss objection and appeal procedures for tax assessments.

Taxation has been defined as the imposition of compulsory levies on individuals and entities by governments in most countries in the world. The primary objective of taxation is essentially to generate revenue or raise money for government expenditure on social welfare.

You were appointed as the accountant of Specks Nigeria Limited on August 31, 2022. Based on self-assessment, the company filed the audited financial statements for the year ended December 31, 2021, together with its tax computations on June 7, 2022, and the relevant tax liabilities were fully paid on the same date.

On August 31, 2022, the Federal Inland Revenue Service raised an assessment that was not in line with the tax returns. At the meeting of the directors held in September 2022, this issue was discussed, and you were mandated to quickly address it so that the assessment would not become final and conclusive.

Required:
a. When will an assessment become final and conclusive? (5 Marks)
b. Discuss the following in relation to objection and appeal procedures:
(i) Time limit for objection and appeal (4 Marks)
(ii) Contents of a notice of objection (4 Marks)
(iii) Amendment of assessment and notice of refusal to amend (NORA) (7 Marks)

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  • 5 Marks

TAX – Nov 2015 – L2 – Q2a – Tax Dispute Resolution

Discussing the required particulars to be included in a Notice of Appeal against an assessment pending before a Tax Appeal Tribunal.

What are the specific particulars to be included in a Notice of Appeal against an assessment pending before a Tax Appeal Tribunal?

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You're reporting an error for "TAX – Nov 2015 – L2 – Q2a – Tax Dispute Resolution"

  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q8 – Companies Income Tax (CIT)

Identify which condition is not required for a notice of objection to be valid under Section 69 of CITA.

In line with the provision of section 69 of Companies Income Tax Act Cap C21 LFN 2004 (as amended), which of the following is NOT a condition for a notice of objection to be valid?
A. It must be in writing and addressed to the Chairman, Federal Inland Revenue Service
B. It must state the grounds of objection, for example, amount of assessable and total profits of the company for the relevant assessment year
C. It must state the tax which the taxpayer claims is payable for the year of assessment
D. It must be raised within thirty days of the date of service of the notice of assessment
E. It must be raised within sixty days of the date of service of the notice of assessment

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  • 8 Marks

PT – Nov 2019 – L2 – Q1b – Tax Administration

Describes the essential elements included in a tax assessment notice issued by the Commissioner-General.

b) The only tool for communicating a tax liability to a taxpayer is through a notice of assessment.

Required: What are the elements of a notice of tax assessment?
(8 marks)

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  • 10 Marks

PT – July 2023 – L2 – Q1c – Tax Administration

Explanation of self-assessment, pre-emptive assessment, administrative assessment, and tax audit assessment.

Explain the following as used in tax administration:
i) Self-Assessment
ii) Pre-emptive Assessment
iii) Administrative Assessment
iv) Tax Audit Assessment

(10 marks)

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  • 5 Marks

PT – Dec 2023 – L2 – Q1d – Tax Administration

Listing eight key elements contained in the Commissioner-General's notice of tax assessment.

Where the Commissioner-General makes an assessment under a tax law, the Commissioner-General shall serve a written notice of the assessment on the taxpayer.

Required:
State EIGHT (8) elements contained in Commissioner-General’s notice of tax assessment. (5 marks)

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