ASHENEWS reports that the Federal Inland Revenue Service (FIRS) says it begin a nationwide compliance monitoring of Value-Added Tax (VAT) and Withholding Tax (WHT) on all taxable individuals, commencing on October 23.
The FIRS chairman, Zacch Adedeji, in a statement on Monday, said the initiative is designed to bolster tax compliance and revenue collection in Nigeria.
While VAT is a consumption tax applied to a product when value is added at various points in the supply chain, starting from production and ending at the point of sale, WHT is deducted at the source by organizations or entities when making payments to suppliers of goods and services.
Organizations are mandated to remit the deducted amount to the tax authority during payments to suppliers or vendors.
According to Adedeji, the monitoring exercise is in accordance with the FIRS Act of 2007 and will be effective from Monday, October 23, 2023.
Read the statement below:
“Pursuant to Sections 2, 8, 26, and 29 of the Federal Inland Revenue Service (Establishment) Act 2007 (as amended), notice is hereby given to all taxable individuals or tax agents, including Non-Governmental Organizations (NGOs), Ministries, Departments, and Agencies (MDAs) of governments at the Federal, State, and Local levels,” he stated.
“The Federal Inland Revenue Service (FIRS) will undertake a nationwide VAT and WHT Compliance monitoring exercise commencing on Monday, October 23, 2023.
“As a result, teams of officers from the Service will visit selected taxpayers, taxable persons (including companies, NGOs, or MDAs) to review their VAT and WHT records.
“This exercise will encompass the accounting years from 2019 to 2022 for taxable individuals whose records were audited by the Service up to the 2018 accounting year.”
Adedeji clarified that for taxpayers whose records have not been audited by the agency up to 2018, the exercise will be extended to include the preceding unaudited years.
“All taxable individuals or tax agents who have made deductions of VAT or WHT on behalf of the Service are required to promptly remit all such deductions to the FIRS within two weeks of this announcement,”
The tax authority also pointed out that taxable individuals or tax agents who are subject to the VAT and WHT compliance monitoring initiative will be duly notified by the FIRS, and the necessary documents and requirements for the exercise will be outlined in the communication sent to the selected entities.
