The Federal Inland Revenue Service (FIRS) has extended the deadline for payment of foreign currency tax liabilities in Naira by one month.
In a statement signed by the Executive Chairman, FIRS, Muhammad Nami, the extension was made due to the number of requests, inquiries and the challenges encountered by taxpayers in sourcing for foreign currencies to offset outstanding tax liabilities.
According to the revenue service, taxpayers are expected to settle their tax liabilities from the 1st of March, 2022 to 31st of March, 2022 in the currency with which the tax is paid.
The notice read: “The extant provision is that the currency of the transaction should be the currency with which the tax is paid. However, this is a one-off window/concession, and the Service would no longer entertain any such request from the taxpaying public.
“The applicable rate shall be the Investors and Exporters (I&E) foreign exchange rate of the Central Bank of Nigeria (CBN) prevailing on the date of the transaction and or when the tax obligation falls due. This concession is available to all taxpayers and covers all tax types, except for companies in the Upstream (Oil & Gas) Sector and all foreign currency tax liabilities falling due on or before 31st December, 2021.
“All payments must be made before the 31st of March, 2022 and upon payment, the relevant documents relating to the transaction together with the evidence of payment must be forwarded to the Office of the Executive Chairman, and a copy submitted to the local tax office where the taxpayer’s file is domiciled”.
A report by PricewaterhouseCoopers (PwC), a multinational professional services network revealed that by law, certain tax liabilities such as VAT and withholding taxes must be paid in the currency of transaction. This means for instance, if a fee was paid in USD then the applicable VAT and WHT must be remitted to the tax authority in USD.
