FACTORS THE COURT CONSIDERS BEFORE SHARING THE ASSETS OF THE FAMILY AFTER DIVORCE

Nigerian courts more often than not share property in a marriage to the benefit of men, who usually have higher income. This is because the court insists on contribution as the basis for division. The court has decided that direct financial contribution to the purchase price of a matrimonial home or to the repayment of the mortgage must be proved before joint property can be inferred (Essien v. Essien (2009) 9 NWLR (Pt. 1146) 306, 331-332), where the Court of Appeal restated the decision of the Supreme Court in Adaku Amadi v. Edward Nwosu (1992) 6 SCNJ 59). The court accordingly refused the appellant's case on the basis that she did not prove contribution. In Oghoyone v Oghoyone (see Question 5), the court held that the respondent was entitled to joint interest because both parties contributed to the property. Contribution by a party does not necessarily have to be in the nature of a cash outlay for the purchase or development of the property. For example, contribution can be by way of moral and/or financial contribution to the business of the other party where the property is acquired with the profits of the business (Ibeabuchi v. Ibeabuchi (2016) LPELR-41268). Given the discretionary powers of the court under the law, it is suggested that contribution should not be the major consideration. The attitude of the court will do injustice in many cases against the intention of section 72 of the Matrimonial Causes Act. For example, a party may have been taking care of the children's food or school fees when the property was acquired by the other. This has resulted in a situation where parties who have properties abroad prefer to petition for the division of assets in countries where the courts are more favourable to women.

HOW TO REGISTER A CHURCH OR NON GOVERNMENTAL ORGANIZATION (NGO) IN NIGERIA

HOW TO REGISTER AN NGO IN NIGERIA STEPS TO REGISTERING AN NGO IN NIGERIA Non-Government Organisations (NGOs), sometimes called Civil Society Organisations (CSOs). They are non-profit, voluntary citizen’s groups organised for a common interest and perform a variety of service and humanitarian functions. They are organised around specific issues, such as human rights, child rights, health care, etc. They are usually funded by donations and are run primarily by volunteers. They are exempt from tax in Nigeria. Although an NGO is not a commercial entity, the Corporate Affairs Commission views it as an entity which needs to be registered nonetheless. There is therefore a laid down process for the registration of NGOs in Nigeria. This article will give a step by step breakdown of the process. The registration of NGOs is a bit peculiar in that it can be done under Part A of the Companies and Allied Matters Act as a company limited by guarantee or under Part C of the Companies and Allied Matters Act as Incorporated Trustees. This article will explain the process to register an NGO under Part C. STEP 1 As with all registration of entities in Nigeria, the first step is to conduct a search on the name to find out if it is available and to reserve the name if available. It is always advisable to have at least 2 names, one alternate in case the primary name is unavailable. STEP 2 NGOs and CSOs are supposed to be governed and managed by what is known as a Board of Trustees. These are the equivalent of what a shareholder/director would be in an incorporated company. The Trustees of an NGO or a CSO are responsible for the management and direction of the association. STEP 3 Once you have your name approved and your board of trustees in place, the next step for the registration of a NGO in Nigeria is that the Trustees must publish a notification of their intention to register a NGO. This notice must be published in 3 newspapers, one of the newspapers being one that is widely circulated in the area where the organisation will be based. STEP 4 The next step is to complete and submit the application form. The application form is self-explanatory and asks for information like the approved name of the NGO, the registered address of the NGO, a brief description of the aims and objectives of the NGO. The form also requires the personal details of the Trustees, this includes their names, sex, nationality, permanent residential addresses, occupation etc. The completed application form must be submitted alongside other documentation which includes an application letter, the original newspaper publications, two copies of the NGO constitution, the minutes of the meeting where the trustees were appointed, 2 passport photographs of each Trustee etc. STEP 5 All the documentation is then reviewed by the CAC, and if there are no queries, the NGO is registered with the CAC and can then commence operation. J.T. A Esq. 07088326341

CONCEPT OF TAX EXEMPTIONS OF NGOs in NIGERIA

CONCEPT OF TAX EXEMPTIONS OF NGOs in NIGERIA By Barrister Titilope Akogun Tax being a compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions to raise funds for public infrastructure and governance. Generally, tax is assessed in accordance with some dispassionate rules of apportionment on persons or property within the tax jurisdiction. However, the benefits of contributions are not necessarily to be enjoyed proportionately to contributions by individuals. The two major categories of tax laws; being Personal Income Tax Law and the Companies Income Tax Act, exempt from taxes certain categories of individuals and organizations, based on selected criteria and profits of companies engaged in certain public beneficial activities such as humanitarian, sporting, educational or charitable activities, so long as the profits are not derived from trade or business undertakings. The law governing voluntary ‘not for profit’ organizations in Nigeria, is a product of the English common laws. Statutory law governs the creation of a ‘not for profit’ companies. Other ‘not for profit’ organizations, such as unincorporated associations, charitable, charitable trust, friendly societies, political parties, and trade unions also exist in Nigeria. Nigerian companies are taxed under the Companies Income tax Act (CITA). The Companies Income Tax Act, exempt from tax the profits of companies engaged in certain public benefits activities, so long as the profits are not derived from trade or business undertaking. The relevant laws on tax exemption are: 1. The Constitution of the Federal Republic of Nigeria, 1990; 2. Companies and Allied Matters Act; 3. Companies Income Tax Act (CITA); 4. Criminal Code; 5. Federal Inland Revenue Service (Establishment) Act, 2007. Invariably, only non – governmental organisations, educational organizations, sport companies, and organizations which engages itself in humanitarian activities qualifies for tax exemption. A non-governmental organisation (NGO) is an association of persons registered under Section 590 of the Companies and Allied Matters Act (CAMA) 1990. Upon registration of the association, the body corporate may contract in the same form and manner as an individual in accordance with Section 605 of CAMA 1990. It is to be noted that by virtue of the provisions of Section 23 of the Companies Income Tax Act (CITA) any organisation registered under any law within the federation or any part thereof as a co-operative society shall also be treated as an NGO. NGOs include organisations, institutions and companies engaged in ecclesiastical, charitable, benevolent or educational activities of a public character. Many countries, including Nigeria have recognised the significant role being played by these organisations in building a strong, virile, caring and well-functional society as well as in contributing to its welfare and economic growth. In recognition of this, government grants tax incentives to such organisations in form of exemption of their profits excluding those derived from trade or business carried out by them, from income tax and zero rate of Value Added Tax (VAT) for their humanitarian services. The role of the tax authority is to ensure that these tax incentives or benefits are appropriately enjoyed and not abused and that the obligations associated with the tax benefits are complied with by the NGOs. Therefore, these guidelines are to check possible abuse and ensure standardization. An association of persons, which appoints one or more trustees and pursues registration under Part C of the Companies and Allied Matters Act, is called incorporated trustees. Upon registration, the trustees become a body corporate with a perpetual succession, common seal, can acquire and dispose properties in its name, and as well as the power to sue and be sued. There are essentially two forms of association with incorporated trustees. The first form occurs where the trustees are appointed by any community of persons bound together by customs, religion, kinship or nationality. E.g Community or cultural associations. The second form is identified by the fact that the trustees are appointed by anybody or group or association of persons established for any religious, educational, literary, scientific, social, development, cultural, sporting, or charitable purpose. E.g the NGOs. Also, a Company Limited by Guarantee is formed for the promotion of commerce, art, science, religion, sports, culture, education, research, charity, or other similar objects. The income and property of the company is applied solely towards the promotion of its objects. No portion of the company’s income or property may be paid or transferred directly or indirectly to the members of the company except as permitted by the Companies Allied Matters Act. The activities listed in the Companies Income Tax Act for the purposes of tax exemption and deductibility of donations indicate which types of activities of the various organizations are considered to be of public benefit. These may include; ecclesiastical, charitable, educational, or sports. The Taxies and Levies (Approved List for Collection) Act 1998 is the most comprehensive and authoritative legislation on taxes that can be collected by each level of government. In Nigeria, certain types of income are exempted from income tax. The exempted income includes the profit of any company engaged in ecclesiastical, charitable, educational or sporting promotion activities of a public character in so far as such profits are not derived from trade or business carried on by such company where such profits are wholly expendable for such purposes. It should be noted that the Federal Inland Revenue (FIRS) recently issued guidelines stating that all Non-Governmental Organizations (NGO’s) are expected to register with the nearest Integrated Tax Office (ITO) of FIRS with the following documents: i) a copy of registration certificate issued by the Corporate Affairs Commission (CAC) ii) Certified copy of Memorandum or Constitution, Rules and Regulations governing the NGO iii) List and profiles of the Trustees/Board members nominated; one of the Trustees/Board member must be serving government official responsible for the activity of the NGO; iv) Copy of the current Tax Clearance Certificate of each of the Trustees. Having said these, it is mandatory for every NGO to file a tax return every year at the Integrated Tax Office where it was registered as canvassed by the Federal Inland Revenue Service in its recent circular on tax exemption for NGOs and also an annual return at the Corporate Affairs Commission. The laws of Nigeria do not provide for the deductibility of donations made by individuals to Nigerians for non-profit organizations. A tax benefit in the form of an allowable deduction is available to any Nigerian company that makes a donation to certain Nigerian funds and institutions. Specifically, the amount of any donation made by a company to any of the Nigerian specified in the Fifth Schedule of Companies Income Tax Act may not be deducted. Position of Non-Residents in Nigeria. The concept of residence is important in determining the extent of a tax payer’s liability to tax in Nigeria. It is also critical in determining the relevant tax authority (RTA) for the purpose of assessing and collecting tyax. The Federal Inland Revenue Service Information Circular was issued for the information of the general public and in particular all tax payers. The purpose of the Circular was to provide a general description of the application of the Nigerian tax laws to non-residents and in particular the extent of their liability to Nigerian taxes, as well as the payment procedure. In Nigeria, a resident person (individual or corporate) is assessable on the global income. This means that the taxpayer is liable to tax on the income or profits accruing, derived, brought, or received in Nigeria. It also determines the scope of deductions that may be allowed for the purpose of computing an individual’s chargeable income. A non-resident individual for the purpose of the Circular is a person that is not domiciled in Nigeria for less than 183 day, but derives income or profits from Nigeria. A non- resident individual becomes liable to tax from the day he commences to carry trade, business, vocation, or profession in Nigeria. However, he is liable to tax in respect of employment income when he becomes resident. Position of unregistered companies or corporations in Nigeria. Unregistered companies or corporations are companies or corporations not registered in Nigeria, but which derives income or profits from Nigeria. It should be noted that exemption from income does not confer exemption from payment of tax on any company. Every company, resident or non - resident, is liable to tax in Nigeria if its income is liable to tax under the provisions of the Companies Income Tax Act. The character of an organization, especially the facts of registration and the type of activities embarked upon usually determine the tax law applicable to particular company or organization in Nigeria. Section 19 of the Company Income Tax Act exempts from tax fourteen types of income to wit:- a) The profits of any statutory or friendly society, in so far as such profits a not derived from a trade or business carried on by such society; b) The profit of any company being a cooperative society registered under any enactment or law relating to cooperative societies, not being profits from any trade or business carried on by that company other than cooperative activities solely carried out with its members or from any share or other interest possessed by that company in a trade or business in Nigeria carried on by some other persons or authority; c) The profits of any company engaged in ecclesiastical, charitable, or educational activities of a public character in so far as such profits are not derived from a trade or business carried on by such company; d) Companies engaged in petroleum operations in so far as such profits are derived from operations liable to tax under the Petroleum Profits Tax Act, Cap p13, LFN, 2004; e) The profits of any company formed for the purpose of promoting sporting activities where such profits are wholly expendable for such purpose; f) The profits of a company being a trade union registered under the Trade Unions Act in so far as such profits are not derived from a trade or business carried on by such trade union; g) Interest received by a company from the Federal savings Bank (defunct); h) Dividends derived by a company from another company incorporated in Nigeria amongst others. Accordingly, except to the extent that they receive any profit derived from trade or business. Most registered NGOs are exempted from tax. In other words, NGOs to which these provisions apply can engage in trade or business provided that they will enjoy tax exemption only in respect of their income from outside of trade or business. For purpose of emphasis, unregistered NGOs do not enjoy this exemption. Most registered NGOs can out of their own volition persuade the tax authorities that they come within the purview of paragraphs (a) or (c) or (d) above. If they can, then they are exempted automatically. In respect of exemption from state and local income taxes, the applicable state law or local government bye-law may provide for an exemption for NGOs. Note however, that NGOs are not as an organization, exempted from payment of VAT since the tax is not on persons, but goods and services supplied. Whether or not they will pay VAT depends on the goods or services they will buy or sell. The tax is computed at a flat rate of 5% on the value of all taxable goods and services. Also under the Local Government Law, exemption from assessment for and payment of tenement rates is given for premises occupied by charitable institutions, places of religion like churches and mosques, though very contentious, especially in Nigeria, and educational institutions certified by the state Commissioner responsible for education to be non-profit making. However, an NGO registered as such cannot engage in commercial or economic activities. They may therefore engage in these activities if they choose to, as there are no statutory provisions that stop them from doing business directly or through a ‘for-profit’ subsidiary. Incomes from such activities are subject to tax and there are no tax exemption rules applicable on such business activities. This distinguishes between commercial or economic activities related or unrelated to the core objects of NGOs. In conclusion, the profit of any statutory, charitable, ecclesiastical, educational or other similar associations are exempted from CIT obligations provided such profits are not derived from any trade or business carried on by such an organisation or association. Whether or not some NGOs’ operations are commercial in nature would be a theoretical discourse for another day. An attempt to dissect the operations of the organizations, to decipher and distil which of them falls under the exemption and taxable organizations has been resisted in time past, especially by religious organizations. As the administrators of the law are also interwoven and buried under the influence of their godfathers or spiritual fathers, thereby rendering the state political power less effective. The regulation of the latter is primarily hampered in the practice by the non-separation of the individual trustees from the direct personal ownership and benefits of the trust assets belonging to the religious organizations. Where an NGO engages in any trade or business, the profit derived there from will be subjected to income tax as provided for in the Act. Also, where the NGO invests its assets in any institution, the income derived from such investment shall be subjected to tax. It should be noted that Capital Gains Tax (CGT) shall arise where assets are disposed of by the NGOs at a gain. See Section 23(1) of the CITA Cap C21.LFN 2004 Also, in ARBICO LTD VS FBIR, (1996) 2 ALL NLR 303, the plaintiff in the dispute, had acquired a plot of land, erected a building and sold the property at a profit. The company was subsequently assessed for tax on the proceeds of the sale of the property. The company objected to the assessment on the basis that the transaction was a one-off and did not constitute “trade”. The case was, ultimately, settled at the Supreme Court. In the landmark ruling, the court laid down two important precedents: • Firstly, that the word ‘trade’ should be interpreted in its widest sense in accordance with its common everyday meaning; • Secondly, that an isolated one-off transaction can still constitute a ‘trade’. Finally, tax compliance will only be enhanced when good corporate governance and responsibility in accordance with the rule of law, are practised by both the governed and especially those in government. The status quo will be maintained when the governing class perpetually disregards the rule of law. Though while accepting the fact that our tax structure and administration is due for reform, the problems lie more with tax administration than the structural defects. Therefore, on a general note what our tax system needs is patriotism on the part of the government at all levels, tax officials and tax payers, and administrational structure that would further encourage and propel prompt payment of taxes, erasing the bottlenecks and creating a unified registration procedures in virtually all government corporate agencies towards discouraging tax evasion and minimising corruption by its administrators.