Finance

FIRS Grants A One-Off 1 Month Extension To Taxpayers To File CIT Returns

Published

2 years ago

July 2, 2021

Federal Inland Revenue Service- Investorsking

The Federal Inland Revenue Service (FIRS), has granted a one-off 1-month extension to all taxpayers to file Companies Income Tax (CIT) returns and payment of tax liabilities for companies with 31 December accounting year-end.

According to the report, the extension also affects the ongoing exercise for reconciliation of unutilized withholding tax (WHT) credit notes for all companies on TaxPro-Max.

Extended grace has been given to companies who are affected, they have until 31 July 2021 (the new deadline) to regularise their tax profile on TaxPro Max, submit their CIT returns and pay the resulting tax liabilities to avoid payment of late filing penalties and interest on outstanding tax liabilities.

In order to complete the CIT filing process, taxpayers’ will be required to upload excel versions of their income tax computations (not more than 200kb) on the portal and submit hard copies of their signed audited accounts at their respective tax offices. Further, the Payment Reference Number (PRN) (formerly known as Document Identification Number) generated after successful submission of returns will remain valid until midnight of the new due date of filing of the tax. However, companies can continue to make their Value Added Tax (VAT) & WHT payments using the “Branch TIN”.

Finally, the FIRS urged taxpayers who may still have difficulties with filing their returns on TaxPro-Max to escalate such issues to their dedicated virtual situation room support officers at their respective tax offices.

KPMG comments on the extension

We commend the FIRS for extending the filing deadline in response to stakeholders’ concerns on the technical challenges experienced with WHT reconciliation, generating the relevant PRN for prompt payment of tax liabilities and submission of CIT returns on TaxPro-Max. These technical issues were not surprising given how close to the filing deadline the updated portal was launched. It is expected that the extension will avail both the FIRS and taxpayers of the opportunity to promptly address most of the identified issues to ensure a smooth filing season. In this regard, the limited option for document upload, by which taxpayers are required to submit hard copies of their signed audited accounts with their respective tax offices, needs to be addressed to achieve full automation of filing tax returns.

Meanwhile, it is unclear whether the extension covers companies that are not required to file their CIT returns on TaxPro-Max, such as non-resident companies, free trade zones enterprises, or companies with foreign currency-denominated audited accounts. Pending further announcement by the FIRS, these Companies can either ensure that their CIT returns are submitted to their respective tax offices or alternatively apply for an extension of time to file their returns, as the case may be.

Relatedly, the FIRS Public Notice did not address the contentious issue of forfeiture of unvalidated WHT credit notes after the 30 June 2021 deadline noted in its Information Circular No.: 2021/07 (Please refer to our Tax Alert Issue No. 6.6 of 22 June 2021). The TaxPro-Max is expected to provide a more flexible platform for seamless tax compliance and continuous reconciliation of tax positions between the FIRS and taxpayers. Therefore, the FIRS should exercise caution in prescribing and implementing rules on the use of online platforms that are not supported by extant tax laws.

In the meantime, affected companies should in their own interest take advantage of the extended deadline to reconcile their WHT credit position, regularise their tax positions and file their CIT returns on the TaxPro-Max to avoid exposure to penalties.

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Finance

Nigeria’s Tax Revolution: Shifting Burden to the Wealthy and Streamlining the System

Published

3 days ago

September 29, 2023

Samed Olukoya

President Bola Tinubu’s administration is set to revolutionize the nation’s tax system.

The ambitious plan seeks to redistribute the tax burden, making the wealthy pay their fair share while stimulating business growth through corporate tax cuts.

The cornerstone of this tax reform initiative is a push to increase Nigeria’s tax revenue from 11% to 18% of Gross Domestic Product (GDP) within three years.

Spearheading this transformation is Taiwo Oyedele, who leads a panel appointed by President Tinubu.

Oyedele articulated the primary objectives of the reform, saying “We aim to make the rich pay what is fair and protect those in poverty.”

This move is crucial in a country where extreme wealth disparities persist, with only a small fraction of the population enjoying immense riches.

Notably, the plan also includes a reduction in the corporate income tax rate, which currently stands at an effective rate of over 40%.

The aim is to benchmark this rate against Nigeria’s international peers, fostering a more business-friendly environment.

Nigeria’s tax system has long been plagued by complexity, with nearly 70 different taxes and overlapping jurisdictions.

The reform initiative seeks to simplify this by streamlining tax structures and drastically reducing the number of taxes to single digits.

Also, a tax amnesty is under consideration, aimed at encouraging tax compliance and offering relief for past debts. The hope is that by fostering transparency and accountability, more Nigerians will willingly contribute to the country’s fiscal health.

In a nation where government debt has surged dramatically in recent years, this tax revolution is seen as a pivotal step towards reducing the deficit and ensuring sustainable economic growth.

Finance

Federal Government’s $3 Billion Rescue Plan to Bolster Naira Stability

Published

3 days ago

September 29, 2023

Samed Olukoya

The National Economic Council (NEC) has confirmed the deployment of the $3 billion emergency loan-for-crude oil, secured by the Federal Government in August, for the stabilization of the national currency.

The naira’s value has been under siege, with fluctuations in the Investors & Exporters’ window and a parallel market rate that briefly hit N1000/$ this month.

Addressing reporters following the 136th NEC meeting at the Aso Rock Presidential Villa, Nasarawa State Governor Abdullahi Sule expressed confidence in the plan.

He stated, “With the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”

The emergency loan, secured from Afrexim Bank, was initially intended to relieve pressure on the naira, facilitate the settlement of taxes and royalties in advance, and provide the Federal Government with vital dollar liquidity for naira stabilization.

The recent nomination of Olayemi Cardoso as the new Central Bank of Nigeria (CBN) governor by President Bola Tinubu has already shown promise.

The naira experienced a boost in the black market, strengthening by N10 against the dollar, closing at N990/$1.

Governor Sule indicated that the implementation of the intervention would require careful planning and time.

He emphasized the need for the new CBN team to devise effective strategies. In response to inquiries about a supplementary budget, Sule stated that there is no immediate need for one, as the situation does not warrant it.

As Nigeria’s economic landscape faces evolving challenges, the NEC’s decision to harness the $3 billion loan offers a glimmer of hope for a more stable naira in the near future.

Finance

Former FIRS Chairman Muhammad Nami Accused of Controversial N6 Billion Payments After Sudden Exit

Documents reveal questionable approvals and alleged backdating, raising concerns over financial misconduct

Published

4 days ago

September 28, 2023

Samed Olukoya

Muhammad Nami, the former chairman of the Federal Inland Revenue Service (FIRS), is under scrutiny for approving payments totaling N6 billion to contractors and consultants just days after his abrupt removal from office.

Documents obtained by TheCable shed light on these controversial transactions.

Nami, who was succeeded by Zacchaeus Adedeji, greenlit the payments on September 16, two days after his removal on September 14.

Sources privy to the situation, although not authorized to speak publicly, claim that Nami directed staff to work over the weekend to finalize these transactions.

Additionally, files were allegedly moved from the FIRS headquarters to his residence, where they were purportedly “backdated and signed.”

Perhaps the most eyebrow-raising revelation is that Nami transferred approximately N5 billion from the FIRS account to the Joint Tax Board (JTB) without apparent justification.

It is reported that the FIRS director of finance and accounts reluctantly approved these payments after warning Nami about potential repercussions.

Nami allegedly reassured his subordinates that the incoming FIRS chairman would remain oblivious to these approvals.

Also, documents indicate that Nami approved significant payments, including N1.4 billion for a ‘Business Case for Strategic Leadership’ retreat, N250 million for FIRS Data Mining Management and Analytics in Taxation Course, and N221 million for a ‘Skill Development and Management Improvement Workshop Training.’

Curiously, Nami also appropriated over N81 million for a study visit to the Inland Revenue of Malaysia.

The FIRS, when contacted for comment, remained tight-lipped about the situation. Spokesperson Abdullahi Ismaila stated that he had no knowledge of the payments, while Tobi Johannes, Nami’s former media aide, distanced himself from the matter, emphasizing that his role ceased when Nami’s tenure ended.

These revelations have ignited concerns about financial misconduct within the FIRS and have raised questions about the oversight and accountability of government agencies. The full extent of these allegations is yet to be determined as investigations into the payments and their legitimacy continue.