- Account Auditing (2014 to 2016) -- N280,000
- Tax Advisory (2014 to 2016) -- N315,000
- A long list of other expenses + actual income tax -- N205,000
 |
| image: bouncykitty.com |
I still owe the tax advisory firm. There was no way I would have planned to spend more on the paper work than the actual tax due. And that's the reality I am getting used to in this entrepreneurship journey. Imagine doing a business plan and financial projection for a startup, and you create a line for auditing and tax advisory of multiples above the projected tax due. Investors will think you are trying to play a fast one.
Apart from the N800,000 I have been paying monthly VAT and that one in 2016 alone added up to N500,000. And there was 2015 and 2014. In fact, I was told it was the main reason the tax authorities didn't give us a hell of trouble.
Now I am left with PAYE. I will have to start taking a monthly salary and deducting PAYE. I already have a Lagos state tax clearance certificate from my 2012 consultant role for Airtel's sister company, Comviva. Once I am done paying the outstanding fees to the tax advisory firm, I will begin work on the PAYE and salary structure. My other team members have a consultant role and are only liable to withholding tax deduction.
The good side of this is all is that it is forcing me to be more business-like. No more Mr Nice Guy. I used to be quick to give in to people's pleas to help them solve their issues for little or no money, Nowadays, I focus on just standard services I can scale and bill for upfront. No more scopeless (ever expanding scope without payment review) projects. I even avoid individual projects and complicated company projects. I would rather be sleeping at home than running about like a headless chicken for peanuts that will get taxed away. I don't wanna be sweating for the tax man and the auditors. I am now more okay with people getting annoyed with me for not bending to their wish.
. Here is a quick breakdown: Account Auditing (2014 to 2016) -- N280,000 Tax Ad...){kind=link}
Hmmmm, i just learnt a lot from your ordeal. i will avoid all the pitfalls listed above. like no more Mr. nice guy, rather be sleeping. will pay tax monthly and also time to get serious or business-like. thanks once more
ReplyDeleteHappy to help you avoid some of my errors! And about the monthly tax, it is VAT and if you didn't make any sales in a particular month, you just file Nil rather than not show up at their office (which attracts fine).
DeleteHello Michael, is the 5% withholding tax applicable to a consultant role cheaper than that applicable to a full time employee? Is that 5% the only tax on the wages of an individual consultant? What Accounting and Auditing Firm did you use, and what services did they provide for the Tax advisory line item? Thank you very much for sharing. Cheers, Chike.
ReplyDeleteHi Chike,
DeleteWithholding tax is 10%, that's what I have always been charged. The guy who works with the firm that did my tax auditing says its 5% for sole proprietorship but I don't see any example in real life.
Also that's not the only tax. You pay just as much tax as the full-time employee only that you can put up a lot of things/expenses as tax deductible. So your taxable income can be lower than that of equally amount earning employee but you have to be ready to prove with receipts and reasonable explanations why they are official expenses.
I used Anthonio Financial Advisory, I can link you up with them if you Whatsapp me at 08063125227.
Cheers.