Taxation (Standard)

A. Introduction to taxation and tax administration 20% 1. Introduction to taxation (a) Explain the objectives of taxation. (b) Explain the types of taxes and tax system. (c) Explain the basic concepts in taxation: (i) Tax base, tax yield, tax rate, tax incidence; and (ii) Tax burden, tax impact, tax shift, tax effect. (d) Differentiate between tax and other levies. (e) Explain the principles/canons of taxation. (f) Explain the following in relation to taxation in Nigeria: (i) Enabling Acts; and (ii) Sources of the tax laws. (g) Explain the objectives of tax identification number (TIN) (h) Discuss tax amnesty in relation to voluntary assets and income declaration scheme (VAIDS) and voluntary offshore assets regularisation scheme (VOARS)

2. Tax administration in Nigeria Discuss the roles, functions, compositions and powers of: (a) Joint Tax Board; (b) State Board of Internal Revenue; (c) Federal Inland Revenue Service and its management Board; (d) Joint State Revenue Committee; (e) Local Government Revenue Committee; (f) Tax Appeal Tribunal; and (g) Discuss the role and relationship between Fiscal Policy, Tax legislation and Administration 3. Revised National Tax Policy (NTP), 2017 (a) Explain the objectives of this policy. (b) Explain the policy guidelines as they relate to: (i) Guiding principles of Nigerian Tax System; and (ii) Taxation as a tool for economic management and development: ❖ Wealth creation and employment; ❖ Taxation and diversification; ❖ Focus on indirect taxation; ❖ Convergence of tax rates; ❖ Special arrangements and other incentives; ❖ Creating a competitive edge; and ❖ International and regional treaties. (c) Explain the responsibilities of the following stakeholders: (i) The government; (ii) The taxpayer; (iii) Revenue agencies; (iv) Professional bodies, tax practitioners, consultants and agents; and (v) Media and advocacy groups. (d) Explain the administration of the mandates of the three-tiers of government in accordance with the following: (i) Registration of taxable persons; (ii) Tax compliance; (iii) Efficiency of administration; (iv) Technology and tax intelligence; and (v) Dispute resolution. (e) Explain the implementation measures by: (i) The President and Governors; (ii) Legislature; (iii) Ministry of Finance; (iv) Ministries, departments and agencies (MDAs); REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 68 (v) Tax authorities; and (vi) Independent National Electoral Commission (INEC). 4. Basic ethical issues in taxation (a) Explain the following five fundamental principles of ethics as specified by the International Ethics Standards Board for Accountants (IESBA): (i) Integrity; (ii) Objectivity; (iii) Professional competence and due care; (iv) Confidentiality; and (v) Professional behaviour. (b) Discuss the conditions when information on taxpayers may be disclosed. (c) Explain what a tax practitioner should do when there is a conflict of interest. 5. Assessments, objections, appeals and remittances (a) Explain the following types of assessments: (i) Self assessment; (ii) Additional assessment; (iii) Best of judgment (BOJ)/administrative assessment; and (iv) Back duty assessment. (b) Explain the procedures for tax objections and appeals, covering the following: (i) Time limit for objection and appeal; (ii) Contents of a notice of objection and appeal; (iii) Amendment of assessment and refusal to amend; and (iv) Appeal procedures and processes: Tax Appeal Tribunal, Federal High Court, Court of Appeal and Supreme Court. (c) Explain the basis for registration and filing of returns with the revenue authorities covering the following: (i) The need for tax registration and the display of tax identification number (TIN) on all documents; (ii) Time within which to register; (iii) Registration requirements and process; (iv) Contents of a tax return; (v) Due date for filing of tax returns; and (vi) Time within which to pay tax assessed. (d) Explain the following in respect of a tax clearance certificate (TCC): (i) Definition and contents; (ii) T h e conditions for granting a TCC; (iii) The transactions for which a TCC is required; and ( i v ) T he procedure for processing TCC. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 69 B. Transactions taxes 20% 1. Withholding tax (WHT) (a) Explain the nature, objectives and administration of WHT. (b) Explain the transactions/incomes subject to WHT and applicable rates. (c) Identify the relevant tax authority for collection of WHT. (d) Explain the procedure for filing WHT return; list its contents and time frame for compliance. (e) Discuss the procedures and provisions relating to WHT refunds and grounds for objection. (f) Explain the procedure for remittance of WHT to tax authorities. (g) Discuss the administrative bottlenecks and other problems of WHT. (h) Discuss the merits and demerits of WHT scheme. 2. Value added tax (VAT) (a) Explain the nature, objectives and administration of VAT. (b) Explain the following: (i) Goods (tangible and intangible); (ii) Services; (iii) Taxable persons; (iv) Taxable supplies of goods and services; and (v) When goods and services shall be deemed to be supplied in Nigeria in accordance with S33 (2) of the Finance Act 2019 (c) Explain the following in relation to VAT: (i) Input tax; (ii) Output tax; (iii) Exemptions; (iv) Zero-rated supplies and services; (v) Reverse VAT; (vi) Basic tax point; (vii) Actual tax point; and (viii) Standard rate in line with provisions of the Finance Act, 2019. (d) Explain registration and deregistration of value added tax (VAT) for the following: (i) Residents; and (ii) Non-residents. (e) Compute VAT liability, including the treatment of opening and closing inventories. (f) Explain the obligations for registrati on, records and accounts keeping, and valid VAT Invoice. (g) Explain the requirements for filing of VAT returns and remittance of VAT liability. (h) Explain the self-account provision for all supplies for which VAT was not charged. (i) Explain the treatment of VAT on imported and exported goods and services. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 70 (j) Explain the provisions of the Finance Act, 2019 in relation to sale and transfer of assets amongst related parties in business reorganisation and restructuring. (k) State the offences and penalties associated with VAT. (l) Explain the provision on VAT recovery. (m) Explain the provision of tax compliance threshold. 3. Stamp Duties (a) Explain the nature and objectives. (b) Discuss the various terms relating to stamp duties in line with the provisions of the Finance Act, 2019. (c) Explain the instruments and receipts liable to stamp duties. (d) Explain the instruments exempted from stamp duties. (e) Identify the relevant tax authority for collection. (f) Explain the types and forms. (i) Explain the administration of stamp duties. (ii) Explain electronic documents received in Nigeria in accordance with IFRS information circular Number 2020/05 dated April 29, 2020 (iii) Explain modes of denoting stamp duties. (iv) Discuss the functions of the Commissioner for Stamp Duties. (g) Explain the time limit for stamping and implications of non-stamping. (h) Explain the recoverability of outstanding duties. (i) Discuss the stamp duties on loans and credit facilities. (j) Explain the process of adjudication, the limits and appeals procedure. (k) Explain lost instruments and treatment under stamp duty in accordance with Finance Act 2019. (l) Explain instruments which are not properly stamped. (m) Explain mode of calculating ad-valorem duty, (n) Explain the stamping of instruments after execution. (o) Explain duty upon receipts. (p) Explain duty on contracts. (q) Discuss the consequences for non-compliance with the provisions of the Stamp Duties Act. 4. Customs and excise duties (a) Explain the nature, objectives and administration of customs and excise duties. (b) Explain the rates and basis of computation. (c) Identify excisable items taking into consideration the provisions of the Finance Act, 2019. (d) Discuss provisions relating to the furnishing of information by manufacturers and keeping of books. (e) Explain offences and penalties. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 71 5. Luxury tax (a) Explain luxury tax. (b) Explain the relevant goods and servi ces. (c) Identify the applicable rate for each of the goods and services. (d) Explain the benefits of taxation of luxury goods. 6. Land use charge (computation, assessment and dispute resolution) C. Personal income tax 30% 1. Taxation of employment income (a) Explain contract of service and contract for service. (b) Explain the following types of employment: (i) Nigerian employment; and (ii) Foreign employment. (c) Distinguish among employment, vocation and profession. (d) Explain an itinerant worker. (e) Explain the following terminologies in employment income: (i) Cash emolument; (ii) Benefits-in-Kind; and (iii) Taxable and tax-exempt incomes. (f) Explain the conditions for taxation of income from employment. (g) Explain allowable and non-allowable deductions. (h) E xplain the following: (i) Registration for Pay-As-You-Earn (PAYE); (ii) Basis of assessment; (iii) Computation of consolidated relief allowance; (iv) Computation of personal income tax; and (v) Filing of returns: employees and employers. (i) Identify relevant tax authority. (j) Discuss offences and penalties. 2. Taxation of trusts, settlements and estates (a) Discuss trusts, settlements and estates. (b) Explain allowable and non-allowable expenses. (c) Compute income from trusts, settlements and estates. (d) Compute taxable income. (e) Compute tax liability in the hands of beneficiaries and trustees. (f) Identify relevant tax authority. (g) Explain offences and penalties. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 72 3. Taxation of investment income (a) Explain investment income. (b) Compute rental income chargeable to tax on property, including contractor-financed projects. (c) Explain the tax implications of dividends, royalties and interests. (d) Explain the bases of assessments and payment of taxes on investment incomes. (e) Explain franked investment income. D Taxation of business income 30% 1. Taxation of business income (a) Sole proprietorship (i) Explain the meaning of a trade or profession and badges of trade. (ii) Computation of assessable profit of a trade or profession ❖ Identify taxable and non-taxable income. ❖ Identify and explain allowable and non-allowable expenses. (iii) Basis period for assessment ❖ Define basis period and state types. ❖ State the rules for commencement, change of accounting date and cessation. (iv) Capital allowance computation ❖ Define qualifying capital expenditure and capital allowance. ❖ Explain the types of capital allowances and qualifying capital expenditure. ❖ Discuss the conditions for granting capital allowance. ❖ Explain the treatment of capital allowances for small companies ❖ Identify capital allowance rates and restrictions. ❖ Compute balancing adjustments on disposal of qualifying capital expenditure. (v) Loss relief ❖ Identify and explain types of loss reliefs and their treatments. ❖ Explain the treatments of losses under commencement and cessation of business. (vi) Computation of tax liabilities ❖ Compute total profits. ❖ Compute tax liabilities for small, medium-sized and large companies taking into consideration the provisions of Finance Act, 2019. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 73 (b) Partnerships (i) Explain partnership. (ii) E xplain allowable and non-allowable expenses. (iii) Compute the income of a partnership business. (iv) Identify the taxable income of partners. (v) Explain the tax treatment under admission and resignation of a partner. (c) Limited liability companies (i) Identify persons chargeable to companies income tax. (ii) Identify and explain allowable and non-allowable expenses, including the changes introduced by the Finance Act, 2019 (iii) Computation of assessable profit (iv) Basis period for assessment ❖ Explain types. ❖ Explain t h e r u l e s f o r c o m m e n c e m e n t , change of accounting date and cessation of business in accordance with the provisions of the Finance Act, 2019. (v) Capital allowance computation ❖ Explain types of capital allowance. ❖ Explain types of qualifying capital expenditure. ❖ Explain the conditions for granting capital allowance. ❖ Identify and apply the capital allowance rates and restrictions. ❖ Compute balancing adjustments on disposal of qualifying capital expenditure. (vi) Loss relief ❖ Explain Loss relief principles. ❖ Explain the treatment of losses under commencement, change of accounting date and cessation of business in accordance with the provisions of the Finance Act, 2019. (vii) Compute companies income tax liability in accordance with the provisions of the Finance Act, 2019, taking the following into consideration: ❖ Total profit; ❖ Minimum tax; ❖ Dividend distribution; ❖ Ascertain dividends paid out of retained earnings; and ❖ Gross Revenue/Turnover. (ix) Compute and explain the bases for computing deferred tax. 2. Taxation of specialised businesses (a) Explain the terms relating to specialised businesses. (b) Discuss the relevant tax provisions for real estate investment companies which are approved by the Securities and Exchange Commission (SEC) under the relevant provisions of real estate investment schemes (REIS). REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 74 (c) Discuss relevant tax provisions relating to agricultural business. (d) Discuss the tax provisions and compute tax liability on income from transportation, telecommunication, banks and insurance businesses. (e) Discuss the modifications introduced by the Finance Act, 2019 to the tax rules for insurance companies and the presentation of accounts for life assurance and non-life insurance companies. (f) Explain the circumstances when the Revenue can assess a company based on its turnover. (g) Identify and explain criteria that must be met for exemption of profits of a small company from companies income tax (CIT). (h) Explain the basis for taxation of enterprises in free trade zones. (i) Explain the criteria for exempting the profits of a Nigerian company in respect of goods exported from Nigeria. (j) Explain the tax implications of the operation of the regulated securities lending transactions in Nigeria. (k) Explain the provisions of the Nigerian Information Technology Development Agency Act (NITDA) 2007 (as amended) as it relates to taxation. (l) Explain the provisions of the Nigeria Police Trust Fund (Establishment) Act, 2019 as it relates to the levy of 0.005% of the net profit of companies operating in Nigeria. (m) Explain digital taxation (including taxation on income from e-commerce and e-business). 3. Tertiary education tax (a) Explain tertiary education tax. (b) Explain the objectives and basis of computation of tertiary education tax as provided in the enabling Act. (c) Explain why a small company should not pay tertiary education tax. (d) Explain the imposition, assessment and collection of the tax. (e) Discuss the management and administration of the tertiary education tax fund (TETFund). (f) Explain the composition and functions of the board of trustees. (g) Explain the allocation and distribution of the tax. (h) Explain the offences and penalties for non-compliance. Guide to examination assessment ICAN reserves the right to examine any topic in the syllabus at any examination diet. All new laws, regulations and relevant tax circulars may be examined after six months from the dates of issue.