TO: CHIEF OF STAFF – GOVERNOR’S OFFICE
OFFICE OF THE DEPUTY GOVERNOR,
SECRETARY TO THE STATE GOVERNMENT,
STATE COMMISSIONERS,
THE HEAD OF SERVICE,
PERMANENT SECRETARIES,
OFFICE OF THE ACCOUNTANT-GENERAL,
CHIEF EXECUTIVES OF:
CONSORTIUM ON ADMINISTRATION OF SALARIES & PENSIONS (CASP)
STATE AND FEDERAL NON-MINISTERIAL DEPARTMENTS,
CHAIRMEN OF LOCAL GOVERNMENTS,
GENERAL MANAGERS AND CHIEF ACCOUNTANTS OF FIRMS AND
LIMITED LIABILITY COMPANIES,
UNIVERSITIES, POLYTECHNICS AND OTHER TERTIARY INSTITUTIONS,
SECONDARY, PRIMARY AND NURSERY SCHOOLS, ETC
AND ALL OTHER EMPLOYERS OF LABOUR IN OGUN STATE
EMPLOYERS RESIDENT OUTSIDE OGUN STATE

OPERATIONAL GUIDELINE FOR 2006 PAYE TAX MATTERS
This circular on the above subject is issued for your information and necessary action for a hitch-free 2006 P.A.Y.E. Income Tax Operation.

With effect from January 2006 all employers of labour are expected to use their Tax Department or Accountant in computing all their Employees’ PAYE Tax Liability in accordance with the Internal Revenue Service (IRS) Guidelines on PERSONAL INCOME TAX as indicated in the example below:

***Other Allowances to be specified

WHAT IS TAXABLE UNDER ‘PAYE’?
Since May 1999 when the Nigeria Constitution was put into use, the Personal Income Tax Act 1993 as amended became operational. To this end, all remunerations, gains or profits from employment are taxable except those allowed by Law. If you are in doubt please contact our Customer Service Unit on 08023186265 for assistance, OR read the IRS Guidelines on Personal Income Tax and Other Taxes.

ANNUAL TAX RETURN FORM
In view of the above new system adopted, employees do not need to fill the Annual Tax Return Form (Form A) unless they earn additional income from investments such as shares, properties, and part-time employments. Where extra income is earned, the employee is under statutory obligation to disclose same by filling a ‘Form A’ and submitting to IRS Head Office.

RELIEFS/TAX SUFFERED AT SOURCE
All normal relief will automatically be granted but the following reliefs require further processing:
1. Interest on Home Ownership Scheme,
2. Life Assurance Policy,
3. Disability Allowance, and
4. Any other special relief

Therefore, the employee must complete ‘Form A’. The relief would be granted and communicated to the employer.

Tax suffered at source is deductible from employee’s tax liability. Please submit evidence of tax deducted from source if such has been received by IRS. A Certificate of Withholding Tax deduction will be issued and this is used to offset the employee’s tax liability.

DEVELOPMENT LEVY
The Annual Development Levy of N100.00 must be deducted from each employee in the month of April 2006 and same paid to I.R.S. within 10 days of such deduction.

REMITTANCE OF TAX DEDUCTED
Finally, employers are to note that, tax deducted should be remitted to relevant tax office within 10 days after the date of deduction. We have provided Bank Tellers with which payment should be made directly to any of our enlisted Banks within each particular zone. Please do not wait for cheques to be collected, or investigation to be carried out.

Internal Revenue Service (IRS) Ogun State has not hired consultants to collect cheques and our staffs are not allowed to collect same. Any cheque or money given to these people, are at owner’s risk. Please forward a copy of the bank teller to enable us to verify payment and issue receipts. Internal Revenue Service has banking facilities in the Zonal Capital – Abeokuta, Ota, Ilaro, Ijebu-Ode and Shagamu as per attached list of Government Approved Banks for Lodgement.

Your cooperation in faithfully discharging your civic obligation by promptly remitting taxes as at when due is of great importance to revenue collection in this State.

Effective from January 2006, tax payments not made as at when due will attract interest at commercial rate and 10% penalty on a monthly basis. No request for waiver of interest and penalty will be entertained by IRS.

We look forward to your assisting the government to serve you better.

Morenike Babington-Ashaye
Chairman