Tax Planning for Small Businesses
Once your business is a few months old, you need to start thinking of tax planning. In order to ensure that your business does not have any accounting or tax problems in the future, it will be best to ensure all documentations are tidied up with or the relevant authorities. It is advisable to seek the services of a professional such as an accountant or a tax consultant.
Tax Planning is aimed at minimizing the amount of tax a given business is required to pay to the government. It also includes ensuring that there are no mistakes in the taxing process, such as a missed payment, missed filing deadline, inappropriate deductions, or incomplete financial records.
Below are some of the taxes which a new business needs to be aware of:
Companies Income Tax
This is a tax payable on profits from a company’s operations. Currently this is taxed at the rate of 30% on all taxable profits
Capital Gains Tax
This is a tax levied on profits made form the disposal of fixed assets. This is currently taxed at the rate of
Education Tax
This is a tax payable on profits from a company’s operations. Currently this is taxed at the rate of 2% on all taxable profits
PAYE
Pay as you earn is a tax payable on all taxable income from an employment. This is payable to the state government of the state were the employees resides.
Value Added Tax – VAT
Is tax on all goods and services; this is an end user tax. Once paid, it can be passed on to the end user who is saddled with the final burden
Withholding Tax – WHT
Is a payment made via a deduction from payments made for goods and services. The rate however vary based on the type of income and the recipient (either company or individuals)
Stamp Duties
These are duties payable on various legal transactions and legal documentation and registration. The rates however differ depending on the type of transaction.
Petroleum Profit Tax
This is a special tax on all petroleum producing companies.
For further tax and business consultation, kindly contact BAO Partners, 21 Foresythe Street, Lagos Island. Tel: 01 7607751 email bamidele@baopartnership.com.
BAO Partners are offering all Ladies networking members free business advice till 30th September 2010.
