Finally Got My Company Tax Clearance Certificate. Spent N800,000.

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First, all the N800,000 wasn't to FIRS (the tax body). Here is a quick breakdown:

  1. Account Auditing (2014 to 2016) -- N280,000
  2. Tax Advisory (2014 to 2016)  -- N315,000
  3. 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.

1 comment:

  1. 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

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