Jennete Ugo Anya
The Federal Inland Revenue Service (FIRS) has set a 14-day deadline for all individuals and tax agents who have deducted Value Added Tax (VAT) or Withholding Tax (WHT) on behalf of the service to promptly remit these deductions.
The Executive Chairman of FIRS,Dr. Zacch Adedeji, issued this directive in an official statement released recently.
He announced that the service would initiate a nationwide compliance monitoring campaign for VAT and WHT starting from Monday, October 23, 2023.
This initiative will involve teams of officers visiting selected taxpayers, including companies, NGOs, and MDAs, to review their VAT and WHT records.
Dr. Adedeji clarified that this exercise would encompass the accounting years from 2019 to 2022 for taxable persons whose records have been audited by the service up to the 2018 accounting year.
For those whose records have not been audited by the service up to 2018, the scope of the exercise will extend to include prior years that haven’t undergone tax audits.
The FIRS chairman assured that taxpayers or their agents subject to the VAT and WHT compliance monitoring program would be notified in advance, with a list of necessary documents included in the notification letter.
He emphasised that this action is in accordance with Sections 2, 8, 26, and 29 of the Federal Inland Revenue Service (Establishment) Act 2007 (as amended). The notice applies to all taxable individuals and tax agents, including non-governmental organisations (NGOs) and government ministries, departments, and agencies (MDAs) at the federal, state, and local levels.
In the first quarter of 2023, the federal government collected a total of N709.59 billion in VAT, as reported by the National Bureau of Statistics (NBS).
This reflects a 1.75 percent growth in consumption tax compared to N697.38 billion in the fourth quarter of 2022.
Of this amount, local payments contributed N436.10 billion, while foreign VAT accounted for N151.13 billion, and import VAT contributed N122.37 billion in Q1.
In terms of VAT contributors by sector, manufacturing led with 29.65 percent, followed by information and communication at 19.29 percent, and mining and quarrying at 12.24 percent.
Conversely, activities of extraterritorial organisations and bodies had the lowest share at 0.02 percent, followed by activities of households as employers and undifferentiated goods and services-producing activities of households for own use at 0.03 percent, and water supply, sewerage, waste management, and remediation activities at 0.04 percent.
Compared to Q1 2022, VAT collections in Q1 2023 experienced a substantial year-on-year increase of 20.56 percent.
