The Corporate Affairs Commission (CAC) has clarified that payment of taxes does not exempt businesses and other registered entities from filing their annual returns, stressing that the two are separate compliance obligations.
The commission, in a video titled “Annual Returns Is Not Tax, Know the Difference!” shared on its official X handle on Thursday, explained that annual returns are filings made to provide updated information about a registered entity and confirm its continued status on the commission’s register.
It noted that the obligation generally applies whether or not the business was active during the relevant period.
Tax payments, on the other hand, relate to a business’s tax obligations arising from its activities and income. Consequently, settling tax liabilities does not amount to filing annual returns with the CAC.
The annual returns requirement covers registered entities under the commission, including companies, business names and incorporated trustees.
Incorporated trustees may include non-governmental organisations, churches, mosques and cultural associations.
The CAC warned that failure to file annual returns could result in penalties and other compliance issues.
It added that prolonged default could affect an entity’s status on the commission’s register and ultimately expose it to deregistration in accordance with applicable rules.
On the filing process, the commission said annual returns could be submitted through its online platform.
Depending on the type of entity and applicable requirements, the process may involve updating entity details, providing information such as turnover and net assets, attaching financial statements or audited accounts where required, selecting the relevant financial year and submitting the return.
The commission urged businesses and other registered organisations to keep their filings up to date, stressing that meeting tax obligations did not automatically satisfy CAC annual returns requirements.
It noted that maintaining current annual returns helps entities preserve their compliance status and avoid penalties or other consequences associated with prolonged default.