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File company income tax
To file income tax in Nigeria has been made very easy by the government and for the same reason it is also to be noted that in the recent years the economy has seen an increase in the income tax earnings of the government. Formerly the file income tax laws were not strict and the entities were taking advantage to avoid tax in this regard. To file income tax there are several precautions that the entities need to practice to make sure that the tax is filed in line with the requirements of the government of Nigeria. To make the process easier for the tax payers the government has also directed several national as well as private banks to make sure that the entities that come to file income tax are treated in the best possible manner. To understand the file income tax idea following are some of the most important entities that are to be considered in this regard: 1. Company Tax Each and every company beside gas and petroleum sector needs to make sure that the tax return is filed within the proper time that has been designated by the government each year. Companies need to make sure that 30% of total profit is paid to the government in terms of taxation and it is also to be noted that every company is also liable to pay 2% assessable tax to the government which is termed as educational tax. The fiscal year in Nigeria is from 1st January to 31st December but the company can file the tax when its own accounting year ends. The period shall not exceed 6 months from the end date of the accounting year. 2. Petroleum sector The petroleum sector needs to make sure that the 30% of total income is paid as tax when it comes to downstream operations. It is also to be noted that the petroleum sector needs to make sure that to file income tax returns the US dollars are used as currency. The company filing the petroleum tax needs to ensure that the return in filed within 2 months according to the accounting year the company follows. It is also to be noted that the tax of these companies is payable in 12 monthly installments if they are not in a position to pay the tax immediately. 3. Capital gains tax Capital gains arising from the asset disposal are taxed at the rate of 10%. The capital gain tax is also never charged if the asset is disposed off and the new one of similar genre is purchased instead. The value of the new asset is then determined and the tax is charged accordingly to make sure that the government records remain up to the mark. Capital losses are also not charged against normal trading income. In most of the cases it is also to be noted that to charge the capital gain tax inflation is never recommended.