Tax accounting is a branch of accounting that focuses on financial activities that are related to levying and collection of tax. It can also be referred to as taxation.
Tax accounting is more concerned about the tax burden of taxpayers rather than the appearance of public financial statements.
Tax account is prepared based on the tax laws of the state which the tax is being paid to. In other words, tax account is computed in accordance with the relevant tax authority of a territory.
Therefore, there are different tax authority for each state, which are saddled with the responsibility of propounding rules companies and individuals need to adhere to when preparing their tax returns.
Accounting for tax requires an expert in tax laws and financial accounting. The skills and knowledge gained in these two aspects enables the computation of tax returns to be levied against an individual, company, or organizations.
The amount computed by the tax authority to be paid by a taxpayer is known as Tax returns. Again, individual, companies, or organization that is liable to tax is referred to as taxpayers.
The tax administration in Nigeria is vested in the three tiers of government. The tax accrued to the Federal Government is payable to the Federal Inland Revenue Service (FIRS), those accrued to the State Governments are payable to the State Boards of Internal Revenue(SBIRs) of each state in Nigeria, while the rates and levies accrued to the Local Governments are payable to the Local Government Committee.
According to the Federal Inland Revenue Service (FIRS), there are 10 types of taxes collectable by the Federal Inland Revenue Service Boards. This includes:
Officers of Nigerian Foreign Service
This form of tax will be considered extensively in due course.