Tax Consultant at WaterAid

TOR :- Consultancy for Tax Services
 :  FINANCE AND IT DEPARTMENT

Assignment Title and Reference

TAX CONSULTANT

Justification

WaterAid (WANG) sought to ensure compliance with various tax laws operating in-country. These includes: Personal Income Tax - Pay As You Earn (PAYE), Withholding Tax (WHT) and Value Added Tax (VAT). However, these laws are often amended and new provisions made which WaterAid may not be aware of or lack expertise to professionally interpret the law.

PAYE deduction accounts for an average of 15% of staff monthly salary. Some staff are of the view that there are reliefs that WANG is not considering in the computation of staff PAYE liability. For example – non-payroll benefits such as health insurance, life assurance policy and GPC/WC which some staff believes should be added to their income to take advantage of the tax reliefs since this was expressly communicated in their letter of appointments.

WANG approach to the contributory Pension scheme is that the employer pays 10% and the employee 8% in compliance with the law. Based on this, the allowable tax relief is only applied to the employee contribution of 8%. However, some staff complained that they are supposed to get relief based on the total contribution of 18% irrespective of whether the employer pays 10% as pension contribution.

One of the findings from the recently concluded 2020/21 financial year external audit is the deduction and remittance of WHT is not in line with the extant tax legislation. Some deductions were remitted to a wrong Tax Authority. An assessment by a tax expert will determine the amount of wrong withholding tax remittance and provide guidance on how to deal with this.

Another finding from the 2020/21 external audit is that some of our vendor and service providers in the service providers database did not provide evidence of tax clearance certificate before we formally engaged their services. Following the strict tax enforcement by the government on tax compliance by all taxpayers, there is need to determine vendors on WANG database with no evidence of tax clearance certificate and guidance on how to ensure compliance.

Value Added Tax is a consumption tax which suppliers of goods and services are to deduct and remit to government. WANG has been using her registration document with National Planning Commission (NPC) as not liable to VAT to avoid paying VAT. We need to further clarify this position with an expert that our registration status actually allows us not to pay VAT. There are also legal requirements to file 0-rated VAT returns by specific categories of non-governmental organisations. We have not been filling this returns. There is need to be properly guided on how to comply with this requirement.

Though we have consistently obtained Tax Clearance Certificate (TCC) for all staff remitting PAYE to FCT IRS annually, we need proper guidance and support on how to file for TCC for staff remitting their PAYE to other state internal revenue services.

Objectives

• Review tax implementation by WANG and advice on areas that require improvement and available opportunity to maximise the provision of the tax laws (PAYE, WHT, VAT).
• To provide clarity is also needed on the correct relevant tax authority for WHT deducted from enterprises in field offices or WA non focal states.
• Respond to tax related issues highlighted by the 2020/21 external audit findings.
• Prepare a short guidance to guide staff on how to deal with all tax issues relating to WaterAid work
• Finance Staffs capacity is enhanced to ensure tax issues are accurately and timely dealt with and able to relate effectively with FIRS in getting TCC for all staff annually
• Provide assurance to SMT on tax compliance.

Deliverables

• Prepare a briefing paper that provide guidance to WANG staff on WHT and PAYE and VAT as applicable to WaterAid work
• Prepare report on tax implementation (PAYE and WHT) and highlight areas that WANG is compliant or otherwise – provide assurance on accurate compliance with PAYE and WHT across all categories of staff and service providers.
• Provide professional advice if staff on fixed term contracts who are not contributing to Pension can claim the relief.
• Prepare tax liability table for various category of WHT. Determine the amount of wrong WHT remittance to FCT IRS and FIRS.
• Facilitate processing of refund from FCT IRS and FIRS for tax wrongly remitted following the creation of FCT IRS in the year 2019.
• Advice WANG on any other taxation matters that will be beneficial and bring staff to speed with current tax best practices.
• Presentation of findings and recommendation to SMT
• Have a session with staff where questions and answers are provided on PAYE, WHT and VAT administration.
• Build the capacity of the Finance staff to be able to process all categories of tax and tax related issues for all staff and service providers.
• Determine vendor on WANG database with no evidence of Tax Clearance Certificate (TCC).

Impact/

Outcome

WANG will be up to date with the implementation of PAYE, WHT and VAT and to mitigate incurring tax liability in the event of an audit or inspection by the regulatory authority.
Provide assurance to UK Finance and SMT on WANG’s compliance with all relevant tax laws in Nigeria.
WANG Finance staff and SMT properly guided and able to set a system that ensures continuous compliance with the Nigeria tax laws
Guidance document from the Consultant will be used by Finance staff to train and ensure compliance from staff and partners on tax issues and also serve as a reference document.
To forestall reputational damage to WaterAid where Suppliers / Consultants find out that WHT deducted were remitted to a wrong tax authority and they are unable to obtain corporate TCC.
Scope

• This will cover the review of PAYE, WHT and VAT deductions from April 2017 to March 2021.
• The Tax Consultant will review documents relating to PAYE and deduction of WHT from suppliers and contractors and other third party’s payments that no WHT were made.
• The total period of engagement will not be more than 3 weeks. Consultant will visit the Country office during this period to review documents and to discuss with Finance staff and People & Organizational Development staff.
• Tax consultant will Facilitate the recovery of wrong remittance made to either FIRS or FCT IRS. The period for this is outside the 3 weeks mentioned above, but not exceeding 60 days from date of submitting final consultancy report.

Methodology

The Consultant will liaise with the Federal Inland Revenue Services, FCT Internal Revenue Service and other relevant states Internal Revenue Services in the course of discharging the terms of this contract.
Person Specific

• Tax services from a tax practitioner either as chartered tax expert or as an audit firm.
• Minimum of 3 years’ experience in tax consultancy. Evidence of having done some work with FIRS.
• Experience working with an NGO or corporate organisation relating to tax issues.

Milestone plan

• Not more than 3 weeks’ consultancy to be carried out in June 2021.
• to lead on agreeing delivery plan and sign-off.
• Not more than 60 days to obtain refund for wrong WHT remittances.

Communications Strategy

• Request for documents and response to inquiries will be with Finance Manager with support from Finance Officers.
• Approval of TOR by Country Director (CD) and the procurement process initiated by POD with support from HFIT for technical input
• Final approval from Country Director
• Communications will be made by HFIT to CD for approval of this TOR
• The use of WANG service provider data base to obtain EOI for qualified companies.

Budget and funding source

This activity will be funded from FIT Budget for 2021/22 financial year. This is critical to addressing one of the high risks recommendations from the external audit management letter and to give assurance to SMT and staff that there are no potential risks due inadvertent actions.

Apply    
Submission should cover the areas mentioned below

• Expression of Interest
• CV of the Consultant (s)
• Evidence of similar work done previously
• Budget