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Now that You’ve Registered Your NGO, What Next? Obligations of an NGO after CAC Registration


NGOs are now registered under Part F of the Companies and Allied Matters Act (CAMA) 2020. Under the CAMA, NGOs are referred to as Incorporated Trustees, and they include such bodies as NGOs, churches, associations, charitable organisations, scientific or professional bodies. 

Registering an NGO with the CAC is not the end of the obligations of the promoters. It is the beginning. In order to run an NGO successfully without any disturbance from the government, there are several obligations that the NGO must fulfil. These obligations are divided into three sets: CAC obligations, tax obligations, and other obligations. 

CAC Obligations

1. NGOs are required by the CAMA 2020 to file Bi-annual Statement of Affairs with the CAC. The first biannual statement of affairs must be filed not later than the 15th day of July and must be for the period of the first half of the year – January to June, while the second statement is for the second half of the year – July to December, and must be filed within the not later than the 15th day of January. Failure to comply attracts penalties.

2. Like business names and companies registered with the CAC, NGOs must file their annual returns for the year. The annual returns is usually to show that the NGO is still in operation. NGOs must accompany their filings with an audited statement of accounts for the year of return. 

3. NGOs must file other post incorporation matters with the CAC. These post incorporation matters include removal or change of trustees, change in articles of association, change in registered address, or any change at all in the organisations particulars.

Tax Obligations

Many people who incorporate their NGOs suppose that they don’t owe tax obligations to the government. This cannot be farther from the truth. Prior to the enactment of the CAMA 2020 and even after, NGOs owed certain tax obligations to the government. But the responsibilities have now become better accentuated with the enactment of the CAMA, 2020 and the New Finance Act, 2020. The following are tax obligations which an NGO must ensure that it fulfils as it commences operations. 

1. NGOs are required to register with the Federal Inland Revenue Service (FIRS), primarily for the purpose of obtaining Tax Identification Number (TIN). The TIN is required for the purpose of payment of taxes. Generally, NGOs are not required to pay taxes on moneys received by way of grants, donations or gifts etc. But where the income is received through a commercial transaction engaged in by the NGO, then it must pay tax on the income. Such commercial transactions include investments in real estate, stocks or income from business. The NGO is required to disclose such earnings and file returns to the government.

2. Following from the above is the fact that NGOs must file tax returns and Pay taxes on incomes generated from commercial transactions. NGOs must file annual returns with the FIRS, whether the incomes are taxable or not. Failure attracts penalty. Filing of tax returns envisages that the NGO must prepare and audit their accounts yearly. 

3. NGOs must remit PAYE (Pay As You Earn) taxes of their employees to the government. Many NGOs have employees that they pay money to. Unless the employees are working without pay, NGOs are required to remit their PAYE to the government monthly. Failure to do this attracts penalties from the relevant tax authority. 

4. NGOs are now liable to charge and remit VAT on all goods and services they supply. The VAT must be filed not later than the 21st day of the following month when the supply was made. 

Other Obligations

1. NGOs are required by the CAMA to keep accounting records. Ordinarily, every serious organisation ought to keep accounts of its incomes and expenses. Nevertheless, it is prescribed, and default results in penalty.

2. NGOs must register with and collect their Special Control Unit Against Money Laundering (SCUML) Certificate, so that they can accept and give out huge funds without attracting the wary eyes of the Economic and Financial Crimes Commission (EFCC). The SCUML (together with the TIN) is a requirement to open bank accounts. 

Conclusion

In conclusion, registering an NGO is now no longer a safe haven for companies and individuals to avoid taxes. There are several disclosures required by the government which must be attended to with keen eyes, especially with regards to keeping of proper accounts, filing of tax returns, and payment of taxes to the government.  

Thus, individuals seeking to set up an organisation for any purpose must have due regard to these obligations. Registering an NGO involves serious after-registration commitments to the government. If you are not yet ready for the obligations, don’t register it. Otherwise, be prepared to pay your obligations to the government. 

Well, what about those who’ve already commenced without having knowledge of these obligations? It’s never too late to make amends.

Articles on this site are meant for general knowledge only, not as professional advice. If you need personal advice on matters contained herein, you are advised to contact a professional.

We are a firm of legal practitioners and CAC certified agents. We help business owners, entrepreneurs and associations register their businesses, companies and associations with ease. If you need our help with any of the matters contained in the article, feel free to send us a mail at niyiama@yahoo.com or reach us on WhatsApp @ +234-08126194751.

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