Twitter Linkedin Instagram

LIRS’ Conditions for Voluntary Pension Contribution Income Tax Relief: Matters Arising

On Monday, August 21, 2017, the Lagos State Internal Revenue Service (LIRS) released a public notice (the LIRS Notice) on the voluntary pension contribution (VPC) tax relief. According to the LIRS, it will henceforth, only allow the VPC tax relief in the circumstance where there has been no withdrawal of such VPC from the respective retirement savings account (RSA), except in the following instances, that is, where the withdrawing employee:

  1. is above 50years old;
  2. who is below 50years old, is either:
    • a retiree or unemployed on medical grounds; or
    • unemployed, and has so been for a minimum period of 4 months.

The LIRS further threatened that, it will:

  1. periodically audit withdrawals of VPC with the respective Pension Fund Administrators (PFAs) and rely on the statutory provision on artificial or fictitious transactions in this regard;
  2. recover any tax that may be due from unauthorised withdrawals of VPCs, inclusive of penalty and interests, from employers under the PAYE scheme of Personal Income Tax (PIT) administration;
  3. use available judicial processes to defend its position with each taxpayer or employer; and
  4. require each taxpayer claiming VPC relief to submit alongside his or her income tax return, a copy of his or her RSA statement for the relevant tax year and any other period requested by the LIRS.

This piece briefly discusses the legal basis of the VPC tax relief and the legal issues that the LIRS Notice generates.

Read More here

More Articles

Aligning ESG Practices in the Nigerian Oil and Gas Sector with Climate Change and Nigeria’s Net-Zero Goal by 2060

Nigeria’s oil and gas sector evolved over the decades. The sector has moved from an era where little or no effort was put towards addressing the negative impacts occasioned by oil exploration and other incendiary activities, the failure by the Federal Government (FG) to sign the Petroleum Industry Bill into Law and a plethora of socially related malaise that have affected the host communities; their source of livelihood and their living conditions to one where a robust Legislative framework coupled with Regulations have been put in place to make it align with global best practices.

April 26, 2024 No Comments

HIGHLIGHTS OF AO2LAW’S WEBINAR: “PENSION FUND ADMINISTRATORS AND PENSION FUND CUSTODIANS: RETHINKING THE STRICTURES ON COMMON CONTROL.”

On the 17th of April 2024, the firm of Anaje. Olumide. Oke. Akinkugbe (carrying on business as AO2LAW®) held a stakeholders’ webinar with the theme: “Pension Fund Administrators and Pension Fund Custodians: Rethinking the Strictures on Common Control”. The webinar commenced with a keynote address delivered by Mr. Chinedu Anaje, FCIArb, a Partner at AO2LAW. In his address, Mr. Anaje highlighted the roles of the key players within the Nigerian pension industry and reiterated the need for continuous stakeholder engagement to ensure the growth and development of the pension industry in Nigeria. He equally expressed the view that while the extant law on pensions in Nigeria, the Pension Reform Act of 2014 (the “Act”) had been largely successful in actualising its objectives, it was imperative for the stakeholders within the sector to mull over a possible fine-tuning of certain provisions of the Act to ensure alignment with economic realities and international best practices in the administration of pensions.

April 26, 2024 No Comments

A DECADE POST THE PENSION REFORM ACT 2014: ANY NEED FOR CHANGE?

Nigeria’s pension system has undergone significant transformations since its inception in 1951. Initially plagued with malpractices, budgetary issues, weak administration, and a lack of accountability, the system has evolved into a defined contribution scheme for both public and private sector employers and employees. In 2004, the Federal Government enacted the Pension Reform Act 2004 (“PRA 2004”), instituting the Defined Contributory Pension Scheme (“CPS”) and establishing the National Pension Commission (the “Commission”) as the regulatory authority.

April 15, 2024 No Comments
Follow AO2LAW on Twitter
AO2LAW CALENDAR
April 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
2930