APPRAISAL OF TAX OBLIGATIONS OF NON-GOVERNMENTAL ORGANIZATIONS (NGOS) IN NIGERIA

Abstract

Tax obligations of NGO presupposes the relevant legal responsibility imposed on NGO for effective implementation of tax from the NGO in Nigeria. Nigerian government has before now relied heavily on oil as a major source of revenue with which it finances its capital and non-capital projects. Oil as a major source of revenue is failing the country and there is need to resort to other sources of revenue. One vital source is the revenue derivable from taxation of non-governmental organisation. To be able to levy and enforce taxes from NGO, there has to be a clear-cut legislation spelling out the obligations of NGO in the taxation processes. The tax obligations of NGO are not spelt out in a single legislation but scattered in different tax legislations. These tax obligations of NGO are mostly ascertained by inference of the fact that NGO are registered as a corporate body like a company and with the same features as a company, therefore liable to observe those tax obligations when the carry out activities that will render them liable to pay tax usually imposed on a company. The aim of this paper is to appraise the relevant tax obligations of NGO in Nigeria and also make necessary recommendation for effective observance of tax obligations of NGO in Nigeria. The researchers adopted doctrinal legal research methodology with analytical approach using statutes, case law, textbooks, journal articles and Internet materials. The researchers concluded that, there is no dedicated status providing exclusively and with certainty for the operation of NGO in Nigeria other than the piece meal provisions on not-for-profit organizations littered in CAMA, CITA and PITA which at best made blanket provisions, lumping all Non-profit making Organizations such as churches, educational institutions, sports institutions, cultural organizations and charity organizations together in one category. This arrangement breads ambiguity especially with NGO being mentioned and defined only in the FIRS Guidelines on the Tax Treatment of Non-Governmental Organizations (NGO), 2021 but not in any other tax law. The researches therefore recommended that a statute be enacted by the legislature to provide for the formation, operation and regulation of NGO in Nigeria. The statute when enacted will define in clear terms what organizations qualify as NGO, the scope of their operations, the kind of incentives available to such NGO, the extent of the incentives as well as the tax obligations of the NGO clearly spelt out. With this sort of legislation in place, the very many tax laws could then be amended to reflect and achieve the intendment of the revenue drive of the government from the income of NGO. This we believe would introduce certainty in the Nigeria taxing system as it relates to NGO; eschewing the system of all manner of ambiguity.