Vi-M Professional Solutions

Author: Vi-M Professional Solutions

  • The Role of Taxologists in Mergers and Acquisitions

    Mergers and acquisitions (M&A) are complex transactions that involve a lot of moving parts, including tax implications. For businesses considering a merger or acquisition, it’s important to have tax experts on board to navigate the tax landscape and ensure that the transaction is structured in a tax-efficient manner. This is where taxologists come in – professionals who specialize in tax technology and its role in M&A transactions.

    Taxologists play a critical role in M&A transactions by providing expertise in tax technology and its application in M&A. They work closely with both the business and legal teams to understand the tax implications of the transaction and to develop tax-efficient structures that optimize the deal’s tax impact.

    One of the key areas where taxologists can add value in M&A is in the due diligence process. Due diligence is an important step in any M&A transaction, and taxologists can help identify tax risks and opportunities that may impact the deal. Taxologists can analyze tax data to uncover potential tax liabilities, such as unpaid taxes or unclaimed deductions, and help develop a plan to address these issues before they become a problem.

    Taxologists can also help in the structuring of the transaction to optimize the tax impact. This involves analyzing various deal structures and identifying the most tax-efficient approach. For example, taxologists can help identify opportunities to use tax attributes such as net operating losses (NOLs) or tax credits to reduce the tax liability of the transaction.

    In addition to due diligence and deal structuring, taxologists can also provide ongoing support throughout the M&A process. This includes assisting with the preparation of tax returns and filings, managing tax compliance, and ensuring that the transaction is structured in a way that maximizes the tax benefits.

    Overall, the role of taxologists in M&A is becoming increasingly important as businesses seek to optimize the tax impact of their transactions. Taxologists bring specialized expertise in tax technology and its application in M&A, which can help businesses navigate the complexities of tax regulations and achieve a more tax-efficient transaction. By leveraging tax technology and working closely with both the business and legal teams, taxologists can help ensure that M&A transactions are structured in a way that maximizes tax benefits and minimizes risk.

    akudogozy@yahoo.com

  • The Benefits of Outsourcing Taxologist Services

    As the tax landscape continues to evolve, businesses of all sizes are under increasing pressure to remain compliant with ever-changing tax regulations. However, many organizations find it challenging to keep up with these changes, particularly when it comes to tax technology. This is where outsourcing taxologist services can provide a range of benefits.

    What are taxologist services?

    Taxologist services involve the application of tax technology and tax knowledge to help businesses comply with tax regulations. This includes implementing tax software solutions, automating tax processes, and ensuring accurate tax reporting.

    Benefits of outsourcing taxologist services:

    1. Access to expertise

    Outsourcing taxologist services provides access to a team of tax experts who are well-versed in tax technology and regulations. This can help businesses avoid costly mistakes and ensure that they remain compliant with all tax laws.

    1. Cost savings

    Outsourcing taxologist services can be more cost-effective than hiring an in-house team of tax experts. This is particularly true for smaller businesses that may not have the resources to build and maintain an in-house tax team.

    1. Increased efficiency

    Outsourcing taxologist services can help businesses streamline their tax processes and reduce the risk of errors. Tax experts can identify opportunities to automate tax processes, reducing the time and resources required to manage tax compliance.

    1. Focus on core business activities

    By outsourcing taxologist services, businesses can free up internal resources to focus on core business activities. This can help improve overall efficiency and productivity, allowing businesses to grow and expand.

    1. Scalability

    Outsourcing taxologist services provides businesses with the flexibility to scale up or down as needed. This can be particularly beneficial for businesses that experience seasonal fluctuations or rapid growth.

    1. Risk management

    Outsourcing taxologist services can help businesses manage tax risks more effectively. Tax experts can identify potential tax issues and provide proactive solutions to mitigate these risks.

    In conclusion, outsourcing taxologist services can provide businesses with access to tax expertise, cost savings, increased efficiency, scalability, and risk management. By partnering with a reputable taxologist service provider, businesses can ensure that they remain compliant with tax regulations and focus on their core business activities.

  • Eid Mubarak – Celebrate the Festive Season with Vi-M

    Eid Mubarak – Celebrate the Festive Season with Vi-M

    As the holy month of Ramadan comes to an end, we at Vi-M Professional Solutions (“Vi-M”) would like to extend our warmest greetings to you and your family on the occasion of Eid al-Fitr. May this festive season bring you peace, joy, and prosperity.

    At Vi-M, we value the diverse cultures and traditions that our clients and partners bring to our business community. We recognize the important contributions that our Muslim clients have made to our company, and we are grateful for your continued support and partnership.

    As we celebrate Eid al-Fitr, we would like to express our appreciation for your business and loyalty to our company. It is because of clients like you that we are able to continue to grow and succeed in our industry.

    We wish you and your loved ones good health, happiness, and success in all your endeavors. May the blessings of Allah (God) fill your lives with abundance and prosperity.

    Once again, Eid Mubarak to you and your family. Thank you for choosing to do business with us.

  • Celebrating IWD 2023 – Innovation and Technology for gender equality

    Celebrating IWD 2023 – Innovation and Technology for gender equality

    As has been our firm’s tradition for some years now, this year 2023, Vi-M Professional Solutions will once again be celebrating International Women’s Day (IWD) – with Tax Discourse. 

    In line with the 2023 IWD theme, “DigitALL: Innovation and technology for gender equality”, we will be focusing on celebrating and showcasing our deep capabilities in the fields of innovation and digital technology. 

    IWD 2023 Tax Discourse – with Vi-M, will be hosted by our Founder and Partner – Vivian Chigozie-Nmonwu. 

    We will provide free advisory, clarifications and guidance over the phone/ WhatsApp (no. +234 817 320 3657) to female taxpayers, and everyone (male or female) who is a current or potential taxpayer in Nigeria, and is related to one or more women, on:

    1. Any personal or business tax issue in Nigeria.

    2. How the Federal Inland Revenue Service’ Taxpromax works (or other government digital tax platforms in Nigeria).

    3. Accounting, ERP, HR/ Payroll software for business. 

    The free discourse will last for 3 days through Wednesday, 8 March 2023, to Friday, 10 March 2023, from 9.00am to 4.00pm each day. See details on the appended flyer.

    Cheers and Happy International Women’s Day to all Women out there who are consistently breaking bounds and excelling in their chosen careers!

    #iwd2023

  • Just before the elections; tips to protect your business

    Just before the elections; tips to protect your business

    Are you a business owner or manager in Nigeria?

    Here are a few tips to protect your business and keep it relatively stable and running through the uncertainties that usually characterise Nigeria’s elections period:

    1. Insure the business assets, employees and inventory items
    2. Secure the offices, stores, warehouses and business premises 
    3. Call in debts from your trade and other debtors, generally seek to improve cashflows and liquidity 
    4. Prepare cashflow projections and ensure the business has enough cash for its 3 to 6 months cash-flow needs
    5. Build strategic alliances/ partnerships for business continuity 
    6. Ensure that contract terms with clients, suppliers, creditors, partners and staff will be favourable to the business even in unforeseen circumstances 
    7. Improve and ensure constant internal communications
    8. Pay staff salaries 
    9. Improve or ensure ability and capacity to work from home
    10. Review supply chains, put measures in place (as much as possible) to ensure supply chains will not be disrupted even in uncertain circumstances. 
    11. Stock up on inventory needs
    12. Stock up on fuel/ diesel for power
    13. Ensure office/ work tools, computers, printers, etc, are working well. 
    14. Improve or ensure ability to sell online 
    15. Improve capacity in finance and tax management

    * You may adapt as it suits your business

  • What You Need to Know About the Nigeria Startup Act, 2022

    What You Need to Know About the Nigeria Startup Act, 2022

    On the 19th Day of October 2022, the Nigeria Startup Act, 2022 was signed into law by the President of the Federal Republic of Nigeria.

    The objectives of the Act are:

    1. To provide legal and institutional framework for the development of startups in Nigeria.
    2. To provide an enabling environment for the establishment, development and operation of startups in Nigeria
    3. To provide for the development and growth of technology-related talents and
    4. To position Nigeria’s startup ecosystem, as the leading digital technology center in Africa, having excellent innovators with cutting edge skills and exportable capacity.

    Who is this Act for?

    This Act applies to:

    1. Companies incorporated under the Companies, Allied Matters Act, and granted the startup label, in accordance with the provisions of this Act and
    2. Organizations and establishments, whose activities affect the creation, support and incubation of labelled startups in Nigeria. 

    Key components of Nigeria’s 2022 Startup Act

    1. The National Council for Digital Innovation and Entrepreneurship (the Act referred to as “the Council”)
    2. The Startup Support and Engagement portal (referred to as “the Startup Portal”)
    3. The Startup Labelling Process
    4. The Startup Investment Seed Fund
    5. The Tax and Fiscal Incentives

    The Council

    The Council shall be a body corporate with perpetual succession and a common seal. It may sue or be sued in its corporate name and may acquire, hold, purchase, mortgage, and deal with property, movable or immovable, real or personal.

    The Council shall consist of:

    1. The President of the Federal Republic of Nigeria, who shall serve as the Chairman.
    2. The Vice-President of the Federal Republic of Nigeria, who shall serve as the Vice-Chairman
    3. The Minister responsible for Communications and Digital Economy, who shall preside over the Council in the absence of the President and the Vice-President.
    4. The Minister responsible for Finance, Budget, and National Planning
    5. The Minister responsible for Industry, Trade, and Investment
    6. The Minister responsible for Science, Technology, and Innovation
    7. The Governor of the Central Bank of Nigeria (CBN)
    8. Four representatives of the Startup Consultative Forum established under section 12 of this Act.
    9. One member to represent the Nigeria Computer Society
    10. One member to represent the Computer Professionals (Registration Council of Nigeria) and
    11. The Director-General of the National Information Technology Development Agency, who shall serve, as the Secretary of the Council.

    The functions of the Council include the following:

    1. Formulate and provide general policy guidelines for the realization of the objectives of this Act.
    2. Give overall directions for the harmonization of laws and regulations that affect a startup.
    3. Approve the programmes of the Secretariat established under this Act.
    4. Ensure the monitoring and evaluation of the regulatory framework to encourage the development of startups in Nigeria.
    5. Monitor and ensure the implementation of policies and programmes of the Secretariat.
    6. Support digital technological development through grants to persons, research institutions and universities pursuing postgraduate programmes in the areas of science, technology and innovation.

    The Act appoints The National Information Technology Development Agency (NITDA) the Secretariat of the Council and the Director General of NITDA shall serve as the head. As Secretariat of the Council, the agency is responsible for managing the process for labelling a startup, establishing public online platforms and other platforms to provide access to information on matters pertaining to the establishment and development of a startup and collaborating with relevant MDAs (Ministries, Departments and Agencies) and stakeholders to promote innovation in digital technology and enterprise development for a startup in Nigeria among others.

    The Startup Support And Engagement Portal

    With the approval of The Council, the Secretariat establishes The Startup Support and Engagement Portal (this is referred to as The Startup Portal in the Act). 

    * The Startup Portal and app are still under development but interested Startups can in the meantime, send in Applications by email to Info.nitda.gov.ng.

    The Startup Portal shall serve as a platform through which a startup conducts registration process with relevant MDAs. The Portal will facilitate the issuance of permits and licenses required by labelled Startups. Through the Portal, labelled Startups can interface with the Federal Government, Private equity funds, venture capital funds, angel investors, accelerators, incubators and other relevant stakeholders.

    With approval from the Council, the Secretariat shall appoint a Coordinator for the Startup Portal. The coordinator will have a minimum of 10 years’ experience in technology and entrepreneurship.

    The function of the coordinator includes maintaining a register of labelled startups in Nigeria, keeping the relevant documents and records of labelled startups, implement the decisions of the Council on the labelling of a startup and perform all other functions as may be necessary for the implementation of the Act.

    In addition to the above, a consultative body known as the Startup Consultative Forum (referred to as The Forum) shall be set up by the Secretariat upon approval from the Council. The Forum on the Startup portal will provide a platform for information sharing and collaboration in the Nigerian Startup ecosystem. The Forum shall comprise of industry stakeholders and representatives registered on the Startup Portal from labelled startups, venture capitalists, angel investors, incubators, accelerators, innovation hubs and two civil society organizations involved in the advancement of technology and information.

    The Startup Labelling Process

    A Startup Label is a certificate issued by the Secretariat to a startup upon fulfillment of the labelling requirements. To be eligible the startup must be:

    1. A registered limited liability company under the Companies and Allied Matters Act and has been in existence for a period not more than 10 years from the date of incorporation.
    2. Its objects are innovation, development, production, improvement and commercialization of digital technology innovative product or process.
    3. It is a holder or repository of a product or process of digital technology or the owner or author of a registered software.
    4. It has at least one-third local shareholding held by one or more Nigerians as founder or co-founder of the startup.
    5. For sole proprietors, or unincorporated businesses that qualify under these criteria, they would be required to incorporate their businesses as limited liability companies within 3 months of acceptance as labelled Startups.

    The Startup Investment Seed Fund

    The Startup Investment Seed Fund is to be managed by the Nigerian Sovereign Investment Authority and will be used basically to:

    1. Provide labelled startup with finance.
    2. Provide early-stage finance for recommended labelled startups and
    3. Provide relief to technology laboratories, accelerators, incubators and hubs.

    Tax And Fiscal Incentives

    Within the Act, there are tax and fiscal incentives that target the following:

    1. Labelled Startups
    2. Investors investing in labelled startups
    3. Accelerators and Incubators
    4. External Service providers of labelled startups
    • Incentives for a labelled startup under the Pioneer Status Incentive Scheme and other fiscal schemes;

    A labelled startup that falls under the extant pioneer status incentives (PSI) scheme may apply to the Nigerian Investment Promotion Commission (NIPC) for the grant of the tax relief. 

    Such a startup has access to export incentives and financial assistance from the Export Development Fund, Export Expansion grant and the Export Adjustment Scheme Fund.

    The Startup also gains access to Government grants, loans, facilities and financial support through credit guarantee scheme.

    • Incentives and reliefs for investors investing in a labelled startup:

    The investors shall be entitled to an investment tax credit equivalent to 30% of the investment in the labelled startups and capital gains shall not be charged on gains that accrue from the disposal of assets by an investor with respect to a labelled startup.

    • Tax incentives for external service providers.:

    Foreign service providers that provide technical, management, consulting or professional services to labelled startups shall be subjected to 5% withholding tax, (instead of 10%) as final tax on income derived from the provision of services to labelled startups.

    Other incentives for labelled startups in Nigeria will include ease of all regulatory compliance processes and approvals, accelerator and incubator programmes, access to startup innovation clusters, hubs, physical and virtual innovation parks in each state of the federation to enhance collaboration, innovation, capacity building, access to business resources and business opportunities between the startups and large companies and professional service providers, among others.

    You can download the Startup Act 2022, here.

    For more information and enquiries about the Nigeria Startup Act, 2022, please visit NITDA.GOV.NG website.

  • FIRS and LIRS Sign Joint Audit Agreement

    FIRS and LIRS Sign Joint Audit Agreement

    In a recent Memorandum of Understanding signed by the Federal Inland Revenue Service (FIRS) and the Lagos Internal Revenue Service State (LIRS), both agencies have agreed to a collaboration and unification in the areas of tax audit, tax collection, capacity building and exchange of taxpayer information.

    While this move is a good development that gradually introduces tax harmonisation to eliminate multiple taxation or multiple tax audits by both agencies for Lagos taxpayers, it importantly implies that corporate taxpayers in Lagos State will have little hiding place from tax.

    Taxpayer data will become easily available to both tax authorities, as information exchanges take place.

    The FIRS will exchange all the taxpayer data in its purview, including data from international tax information exchanges pertaining to Lagos taxpayers, while LIRS will do the same, including for all those businesses in the informal sector who are not in FIRS’ tax net.

    Read more about the Joint Agreement from the LIRS’ blog – https://lagosstate.gov.ng/?p=61954.

    For more information about how this Joint Agreement can affect your business interests in Lagos State, please do not hesitate to send your enquiries to clients@vi-m.com.

  • THE FEDERAL INLAND REVENUE SERVICE (FIRS) APPOINTS CERTAIN COMPANIES TO WITHHOLD VAT 

    THE FEDERAL INLAND REVENUE SERVICE (FIRS) APPOINTS CERTAIN COMPANIES TO WITHHOLD VAT 

    In its 7th November 2022 Public Notice, the Federal Inland Revenue Service (“FIRS” or the “Service”) informed all persons carrying on a trade, profession or any kind of business, tax practitioners and the general public that effective from 1 January 2023, the following companies are appointed to withhold or collect VAT charged on all taxable supplies made to them:

    1. MTN
    2. Airtel
    3. All money deposit banks (as defined by the CBN Guidelines) (see list here)

    According to the FIRS, this Directive is in accordance with the provisions of Section 14(3) of the Value Added Tax Act Cap. VI LFN 2004 as amended.

    The companies are to comply with the below:

    1. remit the tax withheld or collected, in the currency of transaction to the Service on or before the 21st day of the month immediately following the month the tax was withheld or collected.
    2. the tax withheld or collected under this notice should be remitted in the format prescribed by the FIRS but separately from VAT due on the companies’ taxable supplies.

    A supplier whose output tax is withheld as provided in the Public Notice may: 

    1. deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies, and
    2. where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilize the amount refundable to offset future VAT liability or request for a cash pay-out.

    The FIRS has also assured the affected suppliers that the Service has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement; however, input tax claims (including refunds) are subject to the limitations imposed by Section 17(2)(a) of the VAT Act, which implies that only input tax  paid on imported or locally purchased goods for resale, will qualify for input tax claim.

    A penalty of 150% of such VAT not collected, plus 5% interest above the Central Bank of Nigeria’s rediscount rate in addition to other penalties that may accrue under the relevant laws, will be imposed on anyone obliged to comply with this notice but fail to comply.

    The FIRS has also gone ahead, through subsequent communiques, to make it clear that customers of these entities need not be afraid as they should not be impacted by this new directive. Only the suppliers of goods and services to these entities will have their VAT charged on supplies to these entities withheld at source.

    While this directive may aid easier VAT administration and collection by the FIRS, given that these organizations are properly structured and have the necessary machineries to withhold and remit the VAT as and when due, it imposes extra burden of tax compliance on the affected organizations. These organizations may in turn push the increased burden of tax compliance through to their consumers through price increases. 

    For more enquiries on this FIRS’ Directive, please send an email to clients@vi-m.com.

  • Thank You! & Happy Holidays

    Thank You! & Happy Holidays

    Our #Success story through the years would be incomplete without you. 

    Thank You for sticking with us and for making our existence as a #business possible. 

    We look forward to the coming years with you by our side still.

    And we wish you all the very best this season and in 2023 to come.

    Happy Holidays!

    #christmas2022
    #thankyou

  • Webinar Recording: The New CBN Cash Withdrawal Limits: Potential Tax Implications for Traders and How to Manage Them

    If you are a #trader out there (or interested in trading) and need to learn how the new CBN cash withdrawal limits will impact your business and taxes, please view this webinar recording.

    Please note however, that the Central Bank of Nigeria has now reviewed the cash withdrawal limit policy, following feedback from stakeholders.

    Individuals can now withdraw up to N500,000 per week, and corporate organisations, up to N5million per week, across all channels. 

    Policy will still be effective from 9/01/23.

    Business men and women who need more cash weekly for trading, are encouraged to register their businesses with the Corporate Affairs Commission. This will enable them open business bank accounts so they can benefit from the higher cash withdrawal limits allowable for corporate organisations. 

    For further enquiries or personalised advisory on the subject, please send an email to clients@vi-m.com.