Tax Year-End: How Your Business Can Stay Compliant And Avoid Fines

The tax year-end is fast approaching in Nigeria and Ghana. Businesses have only a few short weeks left to ensure they are ready to comply in full with the laws and regulations around the collection of pay-as-you-earn (PAYE) tax and the submission of tax returns, says Abiola Adegbite, Senior Sales Director, West Africa at Sage.

“We’re seeing tax authorities in West African countries take a firmer line on tax compliance,” he adds. “Businesses of all sizes must, therefore, ensure that they declare the correct earnings for all employees and that they include the right statutory deductions in payroll calculations. Those that do not meet their obligations could face substantial fines and penalty interest.”

Ammishaddai Owusu-Amoah, the Ghana Revenue Authority’s acting Commissioner-General, for example, recently said that the agency would pursue employers and employees found to have engaged in tax evasion to the full extent of the law. Nigeria, meanwhile, loses about US$15 billion a year to tax evasion.

“Tax authorities are taking a zero-tolerance approach to non-compliance because they need to expand the tax base and raise more revenue to increase infrastructure investment and spending on social services,” says Adegbite. “As they continue to tighten their processes and digitise their systems, it is becoming harder for individuals and companies to escape the tax net.”

Adegbite says that the quickest, simplest and, ultimately, most cost-effective way for companies to ensure full compliance with payroll tax laws is to automate the payroll with modern software. “Using spreadsheets and other manual systems is time-consuming and less accurate than automated software,” he adds.

Cloud-based payroll solutions – available for businesses from start-ups to mid-sized companies and larger enterprises – make it easy to generate reports and calculate relevant taxes. Software makes it simpler to keep track of changes to tax regulations that impact the payroll, such as changes to the tax bands or changes to the calculation of statutory deductions.

“By automating payroll processes, companies can save many hours of manual work, freeing up time to focus on growing their businesses and serving their customers,” Adegbite says. “Payroll should not be a chore – it should be a seamless, error-free process that makes it simple to breeze through your pay run each month.”