WHAT IS SELF-ASSESSMENT?
This is a simple mechanism by which taxpayers make their own assessment from which they pay due taxes or be refunded overpaid taxes without having to wait for an assessment by ERS. Under self-assessment, the taxpayer is expected to make payment based on their own assessment before the return submission due date.
Note: A self-assessed return is subject to an audit, therefore taxpayers should exercise diligence when completing returns in order to avoid any omissions of incorrect statements. When in doubt, taxpayers are encouraged to seek guidance from the ERS.
HOW IS SELF-ASSESSMENT DIFFERENT FROM THE TRADITIONAL ASSESSMENT?
With self-assessment, when the taxpayer furnishes their own assessment and submit same to the ERS, that submitted income tax return is deemed to be an assessment by the Commissioner General. Hence, any taxable income that is declared by the taxpayer and any tax payable as indicated in the return submitted is considered due and payable. Therefore, NO notice of assessment confirming tax due will be sent to the taxpayer under self-assessment.
Meanwhile the traditional method of assessment required the taxpayer to submit returns and await a notice of assessment from the Commissioner General informing the taxpayer of their tax liability.
WHO IS REQUIRED TO SELF-ASSESS?
All taxpayers are required to be on self-assessment.
WHAT ARE THE IMPLICATIONS OF SELF-ASSESSMENT?
ADVANTAGES OF SELF-ASSESSMENT
The self-assessment mechanism has the following advantages:
TAXPAYER’S OBLIGATIONS UNDER SELF-ASSESSMENT
NOTE: Section 39 of the Income Tax Order, 1975 provides for the ERS to carry out administrative assessments (i.e. raising estimated assessments) for taxpayers who do not submit income tax returns within the stipulated time and in the manner prescribed.
SRA’S RESPONSIBILITIES TOWARDS SUPPORTING SELF-ASSESSMENT INCLUDE:
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