- 15 Marks
TAX – May 2019 – L2 – Q5 – Withholding Tax (WHT)
Calculate withholding tax credits, determine claim periods, and discuss compliance requirements.
Question
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)
Find Related Questions by Tags, levels, etc.
- Tags: Compliance, Exemptions, Tax Agents, Tax authority, Tax Credits, Withholding Tax
- Level: Level 2
- Topic: Withholding Tax (WHT)
- Series: MAY 2019