January 18, 2022

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Meaning of Itinerant worker in Personal Income Tax (PITA)

Meaning of Itinerant worker in Personal Income Tax (PITA)
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The itinerant worker is any taxpayer that does not have a single place of residence as a result of the nature of his or her job. Some people think that an itinerant person is someone poor. In taxation, this is unlikely. Although itinerant refers to any person that moves from one place to another. It doesn’t mean it must be a poor person. A regional manager is required to move from one state to another to carry out his or her duties. What then is the term? Let’s find out.

Definition of Itinerant worker

The itinerant worker is an individual irrespective of it status, who works at any time in any state during the year of assessment (other than as a member of armed forces) for wages, salaries, or livelihood by working in more than one state and work for a minimum of twenty (20) days in at least three (3) months in every assessment year. This is as defined by the Personal Income Tax Act.

Key Explanation

An itinerant worker can also be referred to as a nomadic individual. Such a person moves from one place to another. You can liken it to the herdsmen who move cattle from one place to another. However, for tax purposes this is different. Here the nomad is a taxpayer. And works under an employer. He moves from one state to another as a result of the nature of his job.

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For example, a regional manager who manages a company with more than one office in more than one state within Nigeria is an itinerant worker. He may also own a home in different states in the country. Or may own a house in one state. Therefore deciding his or her place of residence to be assessed for tax becomes difficult.

The problem here is that it is difficult to conclude the place of residence of an itinerant taxpayer. And the tax authority where the individual must pay tax. This is because he or she has been in more than one location. The personal income tax act makes provision for this. It states that such an individual’s place of residence is where he or she works for a minimum of twenty (20) days in at least three (3) months in every assessment year.

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If the individual was in Delta state for twenty days within three months. Then the place of residence is deemed to be Delta State and the tax authority is in the state as well. Therefore, the individual is eligible to tax in that year of assessment in Delta state. This also applies to other states.

Conclusion

The itinerant taxpayer is a nomad. He or she does not have a single place of residence that tax authorities can use to assess for tax liabilities. In that case, the tax act makes provisions. And that the individual should be assessed to tax on a state he or she resides in. And must have resided in it for at least twenty days in three months within an assessment year.

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