How New Expense Rules Impact Taxpayers

𝗧𝗵𝗲 𝗚𝗜𝗖 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲 𝗶𝘀 𝘀𝗵𝗶𝗳𝘁𝗶𝗻𝗴 In my monthly AccountantsDaily column, I consider the proposed denial of deductions for the general interest charge (GIC) and shortfall interest charge (SIC) which will markedly increase the cost of tax debts. ❝Taxpayers who may already be stretched financially, and who are operating in a challenging economic environment ... may find it even more difficult to bear the increased cost of their tax debts.❞ With the enabling Bill currently before Parliament, and only a handful of sitting days left before the Federal election (in March, April or May?), it remains uncertain whether this measure will be passed before its proposed start date of 1 July 2025. The article explains: ➡️ How GIC/SIC are calculated ➡️ Proposed amendment to deny deductions for GIC/SIC ➡️ Report from recent Senate inquiry (with link to report) ➡️ Recommendations from The Tax Institute’s submission to the inquiry (with link to report) ➡️ What the change will mean for businesses, taxpayers more broadly and the Australian Taxation Office ➡️ Commissioner’s remission discretion ➡️ Existing penal effect of GIC/SIC ➡️ Why clarification is needed to understand the date of application ➡️ Tax considerations when obtaining finance from a bank to pay a tax debt ➡️ Assessability of interest received from the ATO ➡️ Disputed tax debts. Feel free to share your thoughts and comments below 👇 #tax #accountants #thetaxinstitute #tti #robyntax #taxpolicy The Tax Institute Julie Abdalla

𝑫𝒆𝒂𝒓 𝑻𝒂𝒙 𝑴𝒂𝒏𝒂𝒈𝒆𝒓/𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭, 🚨 𝑵𝒐 𝑽𝑨𝑻, 𝑵𝒐 𝑫𝒆𝒅𝒖𝒄𝒕𝒊𝒐𝒏 — 𝑻𝒉𝒂𝒕 𝒘𝒊𝒍𝒍 𝒃𝒆 𝒕𝒉𝒆 𝒏𝒆𝒘 𝒓𝒆𝒂𝒍𝒊𝒕𝒚. In today’s edition of dissecting key provisions of the Nigeria Tax Reform Acts, I’ll be highlighting notable changes around income tax deductions and VAT — and their potential impact on your business. 🧾 “𝑾𝒂𝒊𝒕, 𝒘𝒉𝒂𝒕 𝒅𝒐𝒆𝒔 𝑽𝑨𝑻 𝒉𝒂𝒗𝒆 𝒕𝒐 𝒅𝒐 𝒘𝒊𝒕𝒉 𝒆𝒙𝒑𝒆𝒏𝒔𝒆 𝒄𝒍𝒂𝒊𝒎𝒔 𝒇𝒐𝒓 𝒄𝒐𝒎𝒑𝒖𝒕𝒊𝒏𝒈 𝑪𝒐𝒎𝒑𝒂𝒏𝒚 𝑰𝒏𝒄𝒐𝒎𝒆 𝑻𝒂𝒙 𝒂𝒏𝒅 𝒄𝒂𝒑𝒊𝒕𝒂𝒍 𝒂𝒍𝒍𝒐𝒘𝒂𝒏𝒄𝒆𝒔? A lot under the new Nigeria Tax Act (NTA), things are changing fast, and businesses need to adjust or risk losing key tax benefits. 𝐇𝐞𝐫𝐞’𝐬 𝐰𝐡𝐚𝐭 𝐲𝐨𝐮 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐤𝐧𝐨𝐰: 📌 From the effective date of the Act in January 2026, VAT payment will be a condition for expense deductibility and capital allowance claims. Let that sink in. 👇 📖 According to the NTA: 👉Expenses on which VAT is due but not charged (or on which import VAT/duties were not paid) will no longer be deductible for income tax purposes. 👉Likewise, capital allowance will not be allowed on any asset where VAT is due and was not paid. 💥 In plain English: If you do not pay VAT on a VATable supply or where supplier fails to charge VAT and you don’t self charge, you can't claim income tax deduction for that expense or Capital allowance on the asset. So what’s the way out? 𝑻𝒉𝒆 𝒊𝒅𝒆𝒂? 𝑽𝑨𝑻 𝒎𝒖𝒔𝒕 𝒃𝒆 𝒑𝒂𝒊𝒅 𝒐𝒏 𝑽𝑨𝑻𝒂𝒃𝒍𝒆 𝒔𝒖𝒑𝒑𝒍𝒊𝒆𝒔 ❗ Failure can quickly translate to higher tax liabilities and compliance exposure. ✅ This means: 🔍 Reviewing supplier invoices carefully 📊 Accounting for VAT correctly, pay/self charge as applicable 📌 Being proactive, not reactive 📚Keeping of documents will be key Tax is getting tighter. Compliance is getting stricter. 📉 Don’t lose deductions over VAT oversights. 🧠 Are you aware and ready to comply? 💬 Is it a good development? What issue do you anticipate? Let’s discuss. 🔰 Please Note: The above analysis is based on a publicly available unsigned version of the legislation. Once the signed or gazetted version is released, I’ll provide updates on any material changes. 🙏 Stay tuned, reshare, and connect with Olamide Olaniran ACA, for more insights in this Tax Insight Series on LinkedIn . Let’s navigate these reforms together! 🛡 P.S. – These write-ups are mine and do not represent professional advice from any organization I’m affiliated with. The content is intended to provide a general guide to the subject. Please seek professional tax advice tailored to your specific situation. ✨ Have a great day! #TaxReforms #VAT #TaxActs #NigeriaTaxAct #Compliance

Every taxpayer must know this! The New Tax Regime has become the default for taxpayers. While it offers lower tax slab rates, it comes with trade-offs, building the most investment-linked exemptions. This is what you should know about it: → The NTR provides lower tax rates compared to the old regime but eliminates most deductions like Section 80C. Like, the 30% tax bracket starts at ₹15 lakh in the NTR, compared to ₹10 lakh under the old regime.  → Salaried individuals can switch between regimes annually. However, they must notify their employer about their choice. Business taxpayers have limited flexibility, with only one lifetime switch back to the old regime permitted.  → A ₹50,000 standard deduction is available under both regimes, ensuring some relief for salaried taxpayers.  → The NTR simplifies compliance, making it easier for individuals who don’t invest heavily in tax-saving instruments. On the other hand, the old regime benefits those with significant tax-saving investments and expenditures.  But here is what you should do along with it:  – If salaried, communicate your choice promptly to avoid defaulting to the NTR.   – Form 10-IEA is required for business/professional income earners opting for the old regime.   – While salaried individuals can switch annually, business taxpayers have restricted options.  The New Tax Regime shows a shift toward simplicity and transparency in taxation. However, it also challenges individuals to rethink their financial planning. Whether you choose the old or the new regime, understanding the nuances can help you optimize your tax liability.  Have you chosen your tax regime yet? #taxregime #taxburden

Understanding the New Tax Invoice Requirement for Deductible Expenses: A Guide for Accountants Effective April 1, 2024, the Ghana Revenue Authority (GRA) mandates that expenses claimed for income tax purposes must be supported by a Commissioner-General's tax invoice. This directive, issued under the Revenue Administration Act (RAA), 2016 (Act 915) and aligned with the Income Tax Act, 2015 (Act 896) and the Value Added Tax Act, 2013 (Act 870), aims to ensure transparency and consistency in tax deductions. Key Points: 1. Tax Invoice Definition:A tax invoice (VAT invoice) must be issued on taxable goods and services, including electronic invoices from certified systems. 2. Necessary Records:To claim a tax deduction, maintain records like receipts, vouchers, and tax invoices as stipulated by Act 915. 3. VAT Registered Suppliers:When dealing with VAT registered suppliers, retain tax invoices as evidence. Failure to provide a tax invoice for taxable supplies will disqualify the expense from being deductible. 4. Non-VAT Registered Suppliers: If goods or services are VAT exempt, alternative documentation may be acceptable. The taxpayer must prove the supplier's non-registration status if VAT should have applied. 5. Excluded Expenses: Some expenses, such as payroll costs, regulatory fees, and medical expenses, do not require a tax invoice but must still meet section 9 of Act 896. Transitional Provisions: The guideline applies to transactions from April 1, 2024. For taxpayers with overlapping basis periods, only transactions from the implementation date are affected. Accountants must ensure compliance with these guidelines to avoid disallowed deductions and ensure accurate tax filings. For further details, refer to the GRA’s official documentation or consult with a tax professional. Disclaimer: This post is based on my understanding of the new tax guidelines issued by the Ghana Revenue Authority (GRA) and is not an official communication from the GRA. For official information, please refer to the GRA’s official publications.

There's a big tax change (and you should know about it) The Finance Bill 2025 brings an important update on how "deemed income" is taxed. If you get benefits like employer contributions to PF or pension, or if you receive dividends, these changes might affect you. 📌 What’s Changing? • Employer contributions to PF & pension beyond a limit will now be taxed • Dividends will be taxed based on when they are declared and paid • PF interest beyond a certain limit is also taxable 📌 How This Works in Real Life • If your employer contributes more than ₹2.5L per year to your PF, the extra amount will now be added to your taxable income. • Any interest earned on your PF balance beyond the set limit is also taxable. • Dividends will now be taxed in the year they are declared and made available to you, no more delaying taxes by postponing payouts. A quick example⤵ Say Mr. A earns ₹12L a year, and his employer contributes ₹3.2L to his PF. Under the new rules: • ₹2.5L of the employer's contribution is tax-free, but the extra ₹70,000 is taxable. • He also earns ₹1.2L as PF interest, but ₹20,000 of it crosses the limit—so it’s taxable too. This means he now pays tax on an extra ₹90,000 that wasn’t taxable before. Why does this matter? • If your employer makes large PF or pension contributions, you might have to pay more tax. • If you earn dividends, your tax timing will now depend on when they are declared and paid. • The government is tightening tax rules to prevent deferrals and ensure more income gets taxed in the right year. This change could impact tax planning for many professionals. What are your thoughts on this? Let’s discuss in the comments! Follow Eswaraiah Kakarla for more!