Tax Policies

What is Tax?

Tax is a compulsory financial charge, levy or fee imposed on a taxpayer by the Government (Local, State, Federal) on the production, distribution and consumption of goods, services as well as the disposal of chargable assets.

Taxes may be imposed on income, consumption, etc. primarily to generate revenue for government expenditure and execution of projects for the common good of the citizens.

Who is a Taxpayer?

A taxpayer is an individual (self-employed or employed by another) and every business entity operating in Imo State obligated by relevant laws to pay taxes to the Imo State Government.

What is Tax Compliance?

Tax compliance is the taxpayer’s ability to conform with the extant laws and regulations of Imo State. The taxpayer is required to submit accurate records in addition to satisfactory remittances and returns to the Constituted Tax Authority (IIRS).

What is a Constituted Tax Authority?

A Constituted Tax Authority is a body authorised by law with powers to assess, collect and account for revenues accruable to the Government in the form of taxes, levies, charges, fees etc. It is also mandated to monitor and enforce compliance with extant tax laws to boost Internally Generated Revenue (IGR). In Imo State, the only constituted tax authority is Imo State Internal Revenue Service (IIRS).

Taxpayer Obligations

• The first obligation of a taxpayer is to register and obtain the Imo State Social Security Benefit Number (IMSSBN). This is a pre-requisite for any individual or institution resident in Imo state and wishes to engage in any State Government services e.g., Hospital, Schools, etc.
• Conduct a self-assessment to determine the amount of tax to be paid and remit accordingly. This is for self-employed individuals.
• Deduct and remit PAYE (for employees) to the Government before the 10th day of the succeeding month. The employers of labour act as PAYE agents for the IIRS and are also obligated to submit a schedule showing details of staff monthly salaries and deductions (if any).
• File annual returns on or before the due date(s), which for Direct Assessment is 90 days (March 31st) and for PAYE is 30 days (January 31st) after the commencement of the new year from the year of assessment.
• Declare and pay taxe(s) in full on or before the due dates to the Imo State Treasury Single Account (IMTSA) through the Paydirect platform at any commercial bank, POS and Quickteller terminals at the Headquarters or any of the IIRS offices in the Local Government Areas (LGAs).
• Make full voluntary disclosure of all income and expenditures (for self-employed persons).
• Keep proper books of accounts, records and documents.
• Comply with all other obligations imposed on the taxpayer by the tax laws.

Personal Income Tax (PIT)

This serves as a guide for self-employed individuals and employers of labour, in making their remittances and returns to the Imo State Internal Revenue Service (IIRS). The Personal Income Tax Act (PITA) (as amended 2011) is the law that guides the Imo State Government in collection of Personal Income Tax (PIT) through the IIRS.

All individuals and businesses resident in Imo State (Federal, State and Local Government) have a legal obligation to pay PIT to Imo State Government. There are two methods of PIT collection: Pay-As-You-Earn (PAYE) and Direct Assessments..>>read more

• Pay-As-You-Earn (PAYE) is a method of PIT from employees salaries and wages through deduction at source by an employer. By the provisions of Sections 81 and 82 of PITA (As Amended 2011), the employer is responsible for making such deductions and remitting same to the Government within the stipulated time. These remittances must be accompanied by a detailed schedule of all the employees for which the deductions were made.
• Direct Assessment (DA) is raised directly on self-employed persons (e.g., Professionals, Contractors, Traders etc.). Section 41 of PITA charges such persons to, without notice or demand, file a return of income earned in the preceding year to the State tax authority.

Withholding Taxes (WHT):

It is the specified amount deducted at source from payment made to individuals or corporate entities in respect to services rendered. This amount (for individuals and enterprises) is remitted to Imo State Government in line with the provision of Personal Income Tax Act (PITA).

Capital Gains Tax (CGT) (Individuals only)

It is a tax on the profit made from the sales of Land, Shares, Machinery etc.

Stamp duties

It is a tax imposed on legal instruments/documents executed by individuals, this tax is usually placed on the transfer of buildings, copyrights, land, patents and securities.

Hotel occupancy and Restaurant Consumption Tax: (where applicable)

It is a tax imposed on goods and services consumed in hotels, bars, restaurants and event centers within Imo State. This tax is payable by the consumers who purchase these goods and services. The hotels, bars, restaurants and event centers etc. serve as collecting agents for the government and are expected to remit same to the government within the stipulated time. See the Hotel Occupancy and Restaurant Consumption Tax Law of Imo State

Land use Charge (where applicable)

The Land Use Charge Tax is backed by The Land Use Charge Law (2020) which was introduced to consolidate all land-based charges under one single charge for ease of administration and collection. The owners of land or landed properties in the state are obligated to pay this tax to the Government.