Burdensome process amidst harsh business environment kills returns to CAC
Leading corporate experts have traced the observed avoidance of yearly filing of financial activities to the Corporate Affairs Commission (CAC) as required by law by corporate entities in Nigeria.
Speaking on why companies fail to do the monthly or yearly needful in filing returns, a tax consultant, Mrs. Judith Ademurie said “I think the legal requirement that companies should on a monthly basis file returns whether there is business or n o business on its part is discouraging and capable of putting off company owners”.
“Some of us that are hired by companies for the monthly filing process are being fired by the companies because there is no business or business is not doing well. Many of the newly registered companies or even older ones who are facing harsh business environment have sacked their tax consultants.
“So, they do not file any longer on a monthly basis upon which the data for the yearly returns will be determined at the end of the financial year.
According to her, there had been a suggestion for the Federal Inland Revenue Service (FIRS) to review the monthly tax returns process to quarterly so that companies will not bordered with tax issues every month, but government is not ready to do that.
In its latest report, the Corporate Affairs Commission (CAC) said about 70 per cent of the registered entities between 2016 and 2018 failed to file returns of their financial activities to it as required by law.
The Commission argued that under the review year, it recorded a total of 190,078 or 31 per cent return filings from entities, as against 618,309 registrations recorded within the period.
Explaining more on the situation, the Acting Registrar-General, CAC, Lady Azuka Azinge, during the quarterly customers/stakeholders’ forum held in Lagos during the week, hinted that the law demands that failure to file returns to the CAC can lead to delisting of such entities from the registered list of the commission.
Azinge further disclosed that a breakdown of the filings showed that registered companies recorded 145,329 fillings, business names recorded 26,593 filings, while 18,156 incorporated trustee filings were returned in the period under review.