What is CAC Annual Returns?
CAC annual returns refer to a mandatory yearly filing that all registered businesses, including business names, limited liability companies, and incorporated trustees, must submit to the Corporate Affairs Commission. It is a statutory requirement under the Companies and Allied Matters Act (CAMA) that helps maintain an up-to-date record of businesses operating in Nigeria.
Purpose of CAC Annual Returns
- Business Record Maintenance – Ensures the CAC has updated information about the company’s status and operations.
- Legal Compliance – Prevents deregistration or striking off from the CAC register.
- Proof of Active Operation – Confirms that the business is still operational.
- Avoidance of Penalties – Late filing attracts fines, which can increase the longer it remains unfiled.
Who Should File CAC Annual Returns?
Business Names
Private Limited Companies (Ltd)
Public Limited Companies (Plc)
Incorporated Trustees (NGOs, churches, associations)
How to File CAC Annual Returns
- Prepare and complete the CAC Form for Annual Returns.
- Pay the prescribed fee.
- Submit the documents online via the CAC portal.
- Obtain confirmation of filing.
What is Tax Payment?
Tax payment is a financial obligation imposed on businesses and individuals by the Federal Inland Revenue Service (FIRS) or state tax authorities. It is mandatory for businesses to pay taxes based on their income, turnover, or other taxable criteria.
Types of Business Taxes in Nigeria
- Company Income Tax (CIT) – Paid by companies on their profits.
- Value Added Tax (VAT) – Charged on goods and services at 7.5%.
- Personal Income Tax (PIT) – Paid by business owners, employees, and sole proprietors.
- Withholding Tax (WHT) – Deducted at the source for certain payments like contracts and professional services.
- Education Tax (ET) – Paid by companies for the development of the education sector.
When is Tax Payment Due?
VAT: Monthly, on or before the 21st.
CIT: Annually, before June 30th for companies with a December 31st year-end.
PIT: Annually, before March 31st.
WHT: Monthly, before the 21st.
How to Pay Taxes in Nigeria
- Calculate the taxable amount.
- Generate a payment reference on the FIRS portal.
- Make payment via bank or online platforms.
- File the necessary tax returns.
Differences Between CAC Annual Returns and Tax Payments
| Feature | CAC Annual Returns | Tax Payment |
| Purpose | Maintains business records with CAC | Contributes to government revenue |
| Regulatory Body | Corporate Affairs Commission (CAC) | Federal Inland Revenue Service (FIRS) |
| Payment Type | Fixed fee based on business category | Variable amount based on income or transactions |
| Filing Requirement | Every business, even if not operational | Only businesses with taxable income |
| Penalty for Non-Compliance | Late fees, possible deregistration | Fines, legal actions, business closure |
Common Misconceptions
- “If I pay my CAC annual returns, I don’t need to pay tax.”
False. Filing CAC annual returns does not replace tax obligations. They are separate processes.
- “My business has not made profits, so I don’t need to file annual returns.”
False. Even dormant companies must file CAC annual returns to remain compliant.
- “Paying VAT covers all tax obligations.”
False. VAT is just one form of tax; other taxes may still be required.
- “Filing tax returns with FIRS means I have also complied with CAC requirements.”
False. CAC and FIRS operate independently, and each has its own compliance rules.
Consequences of Non-Compliance
If You Fail to File CAC Annual Returns
Accumulated penalties.
Business deregistration.
Legal restrictions on obtaining a CTC or making changes to the company.
If You Fail to Pay Taxes
Accrued interests and fines.
Risk of business shutdown.
Legal action and prosecution.
Difficulty in obtaining tax clearance certificates.
Conclusion
Filing CAC annual returns and paying taxes are two distinct but equally important obligations for Nigerian businesses. Understanding the difference ensures full compliance, avoids penalties, and maintains good standing with regulatory authorities. Business owners must take both processes seriously to ensure their businesses remain legally operational.
Need Help with CAC Annual Returns or Tax Filing?
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