Question Tag: Tax authority

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  • 15 Marks

ATAX – Nov 2018 – L3 – Q5 – Capital Gains Tax

Calculation of capital gains tax for properties sold, inherited, and acquired by the government, with tax authority determination.

As a senior official in a firm of tax consultants, your tax manager has just discussed issues relating to one of your clients.

The summary of the discussion is as follows:

Mr. Eket, a native of Oron who resides in Uyo, Akwa Ibom State, owned two properties, one in Kano and the other in Benin. The property in Kano was built at a cost of N23 million, while that in Benin was acquired at a cost of N19.5 million. In the year 2012, the property in Kano was sold by Mr. Eket for N32 million, with disposal expenses amounting to N2.80 million.

In the year 2014, Mr. Eket died, and the property in Benin was transferred to his wife, Emem, by the executor of his will. The market value of the properties in Kano and Benin were N28 million and N23 million, respectively.

In October 2016, the property in Benin was acquired by the Edo State Government for highway construction, and a compensation of N27 million was paid to Emem.

Required:

  • (a) Determine the capital gains tax payable (if any).
    (5 Marks)
  • (b) Determine the relevant tax authority to which the liability is due.
    (5 Marks)
  • (c) Give reasons for the treatment in (a) and (b).
    (5 Marks)

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  • 5 Marks

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

Mr. Abass works with the Federal Ministry of Works, Abuja. He lives in a self-contained flat in Gwagwalada and travels every weekend to see his first wife and children in Kaduna. He also visits and stays with his second wife and children in Nyanya, Nassarawa State on Thursdays and Fridays of every week.

Required:
Determine the tax authority to which Mr. Abass would be liable to tax in any year of assessment.

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  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q5 – Tax Administration and Enforcement

Identify the correct name for the management board of the Federal Inland Revenue Service.

The management board of the Federal Inland Revenue Service is known as:
A. Federal Inland Revenue Service Board
B. Federal Internal Revenue Service Board
C. Board of Federal Inland Revenue Service
D. Board of Federal Revenue Service
E. Federal Board of Inland Revenue Service

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  • 15 Marks

TAX – May 2019 – L2 – Q5 – Withholding Tax (WHT)

Calculate withholding tax credits, determine claim periods, and discuss compliance requirements.

Oloriogun Logistics Limited renders consultancy services to newspaper publishing companies in Nigeria. All the publishers are limited liability companies which deduct appropriate withholding taxes from all consultancies and remit to relevant tax authorities within the time limit specified by the law. Oloriogun Logistics Limited makes up its accounts to December 31 each year and suffered withholding tax on the invoices raised for specific dates as follows:

Date of Remittance Month of Transaction Invoice Number Amount (N)
19/2/2015 Jan. 2015 002/01 350,000
19/3/2015 Feb. 2015 003/02 670,000
20/4/2015 March 2015 004/03 810,000
20/5/2015 April 2015 005/04 305,000
19/6/2015 May 2015 006/05 295,000
20/8/2015 June 2015 008/07 922,000
21/9/2015 Aug. 2015 009/08 270,000
21/10/2015 Sept. 2015 010/09 195,000
20/11/2015 Oct. 2015 011/10 408,000
21/12/2015 Nov. 2015 012/11 495,000
21/01/2016 Dec. 2015 012/12 396,000
21/03/2016 Jan. & Feb. 2016 01/02 1,649,000

Withholding tax credit notes on the above invoices were forwarded to Diederik Logistics Limited, but the accountant was confused as to which year of assessment to claim these tax credits.

Required:
(a) Calculate the withholding tax credits for each of the above invoices. (6 Marks)
(b) Determine the total amount of withholding tax credits to be claimed for each year of assessment. (3 Marks)
(c) What is the due date for remitting withholding tax returns to the tax authority mentioned in (b) above? (1 Mark)
(d) State three transactions exempted from withholding tax in Nigeria. (3 Marks)
(e) List four distinct groups referred to as agents of the government for the collection and remittance of withholding tax in Nigeria. (2 Marks)

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  • 6 Marks

AT – Nov 2020 – L3 – Q3c – International taxation

A paper to the Commissioner-General outlining factors to consider in a related party transaction for SuccessVehicles Ltd.

Two vehicles of the same model and brand were sold by SuccessVehicles Ltd to two buyers at different prices. The first buyer bought one of the vehicles at the equivalent of US$84,500 and the second buyer bought the other vehicle at US$91,000. This arrangement, the Tax Authority finds difficult to accept and plans to confront SuccessVehicles Ltd on the matter.

The Commissioner-General has invited you as a final level student of ICAG to advise him on the factors to consider before approaching SuccessVehicles Ltd on the matter, as the Commissioner-General suspects related party issues.

Required:
Write a paper to the Commissioner-General on the issues to consider before approaching SuccessVehicles Ltd on the matter.

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  • 15 Marks

ATAX – Nov 2018 – L3 – Q5 – Capital Gains Tax

Calculation of capital gains tax for properties sold, inherited, and acquired by the government, with tax authority determination.

As a senior official in a firm of tax consultants, your tax manager has just discussed issues relating to one of your clients.

The summary of the discussion is as follows:

Mr. Eket, a native of Oron who resides in Uyo, Akwa Ibom State, owned two properties, one in Kano and the other in Benin. The property in Kano was built at a cost of N23 million, while that in Benin was acquired at a cost of N19.5 million. In the year 2012, the property in Kano was sold by Mr. Eket for N32 million, with disposal expenses amounting to N2.80 million.

In the year 2014, Mr. Eket died, and the property in Benin was transferred to his wife, Emem, by the executor of his will. The market value of the properties in Kano and Benin were N28 million and N23 million, respectively.

In October 2016, the property in Benin was acquired by the Edo State Government for highway construction, and a compensation of N27 million was paid to Emem.

Required:

  • (a) Determine the capital gains tax payable (if any).
    (5 Marks)
  • (b) Determine the relevant tax authority to which the liability is due.
    (5 Marks)
  • (c) Give reasons for the treatment in (a) and (b).
    (5 Marks)

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  • 5 Marks

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

Mr. Abass works with the Federal Ministry of Works, Abuja. He lives in a self-contained flat in Gwagwalada and travels every weekend to see his first wife and children in Kaduna. He also visits and stays with his second wife and children in Nyanya, Nassarawa State on Thursdays and Fridays of every week.

Required:
Determine the tax authority to which Mr. Abass would be liable to tax in any year of assessment.

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  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q5 – Tax Administration and Enforcement

Identify the correct name for the management board of the Federal Inland Revenue Service.

The management board of the Federal Inland Revenue Service is known as:
A. Federal Inland Revenue Service Board
B. Federal Internal Revenue Service Board
C. Board of Federal Inland Revenue Service
D. Board of Federal Revenue Service
E. Federal Board of Inland Revenue Service

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  • 15 Marks

TAX – May 2019 – L2 – Q5 – Withholding Tax (WHT)

Calculate withholding tax credits, determine claim periods, and discuss compliance requirements.

Oloriogun Logistics Limited renders consultancy services to newspaper publishing companies in Nigeria. All the publishers are limited liability companies which deduct appropriate withholding taxes from all consultancies and remit to relevant tax authorities within the time limit specified by the law. Oloriogun Logistics Limited makes up its accounts to December 31 each year and suffered withholding tax on the invoices raised for specific dates as follows:

Date of Remittance Month of Transaction Invoice Number Amount (N)
19/2/2015 Jan. 2015 002/01 350,000
19/3/2015 Feb. 2015 003/02 670,000
20/4/2015 March 2015 004/03 810,000
20/5/2015 April 2015 005/04 305,000
19/6/2015 May 2015 006/05 295,000
20/8/2015 June 2015 008/07 922,000
21/9/2015 Aug. 2015 009/08 270,000
21/10/2015 Sept. 2015 010/09 195,000
20/11/2015 Oct. 2015 011/10 408,000
21/12/2015 Nov. 2015 012/11 495,000
21/01/2016 Dec. 2015 012/12 396,000
21/03/2016 Jan. & Feb. 2016 01/02 1,649,000

Withholding tax credit notes on the above invoices were forwarded to Diederik Logistics Limited, but the accountant was confused as to which year of assessment to claim these tax credits.

Required:
(a) Calculate the withholding tax credits for each of the above invoices. (6 Marks)
(b) Determine the total amount of withholding tax credits to be claimed for each year of assessment. (3 Marks)
(c) What is the due date for remitting withholding tax returns to the tax authority mentioned in (b) above? (1 Mark)
(d) State three transactions exempted from withholding tax in Nigeria. (3 Marks)
(e) List four distinct groups referred to as agents of the government for the collection and remittance of withholding tax in Nigeria. (2 Marks)

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  • 6 Marks

AT – Nov 2020 – L3 – Q3c – International taxation

A paper to the Commissioner-General outlining factors to consider in a related party transaction for SuccessVehicles Ltd.

Two vehicles of the same model and brand were sold by SuccessVehicles Ltd to two buyers at different prices. The first buyer bought one of the vehicles at the equivalent of US$84,500 and the second buyer bought the other vehicle at US$91,000. This arrangement, the Tax Authority finds difficult to accept and plans to confront SuccessVehicles Ltd on the matter.

The Commissioner-General has invited you as a final level student of ICAG to advise him on the factors to consider before approaching SuccessVehicles Ltd on the matter, as the Commissioner-General suspects related party issues.

Required:
Write a paper to the Commissioner-General on the issues to consider before approaching SuccessVehicles Ltd on the matter.

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