The Federal Inland Revenue Service (FIRS) has announced plans to embark on a nationwide Value Added Tax (VAT) and Withholding Tax (WHT) compliance from July 2022.
The operation follows the Service’s earlier announcement that it would begin enforcing and recovering unpaid tax deductions owing to the Federation by some States and Local Governments.
This was due to the failure of defaulting States and Local Governments to remit, thus FIRS advised the Federal Government and the Minister of Finance to deny any request for the issuance of state bonds or other securities in the capital market, as well as requests for external borrowing and approval of domestic loans from commercial banks or other financial institutions by any of the State or Local Government.
According to Mr. Johannes Wojuola, the Special Assistant to the Chairman, FIRS on Media and Communication, teams of FIRS officers would visit selected taxpayers and taxable persons to assess their VAT and WHT records.
“The exercise will cover 2016 to 2020 accounting years for taxable persons whose records have been audited by the service up to 2015 accounting year.
“For taxpayers whose records have not been audited by the service up to 2015, the exercise will be extended to include the prior years that have not been tax audited.
“We, therefore, call on all taxable persons and tax agents to immediately remit deductions of VAT and Withholding Tax they have made,“ he said.
The information contained in a public notice announcing the compliance monitoring exercise, and signed by the FIRS Executive Chairman, Muhammad Nami further stated that those who would be visited during the monitoring exercise will be notified and informed of the required documents for review beforehand.
Despite the challenges faced by the agency, Investors King gathered that FIRS recorded a revenue elevation up to N6.4 Trillion in the 2021 Financial Year (FY).
This according to Investors King was due to the introduction of TaxPro Max, a new automated tax system, the FIRS used to streamline tax payments and modernize the country’s tax structure. The figures exceeded its goal by more than a hundred percent.
