- FIRS Fixes Deadline on Monthly Payments of VAT
The Federal Inland Revenue (FIRS) has fixed the 21st of every month as the deadline for the payment of Value Added Tax (VAT) by companies in Nigeria.
This was revealed on Wednesday in a statement signed by Mr. Babatunde Fowler, the Chairman, FIRS.
According to him, some companies have been found culpable of not deducting the tax from payments made to their distributors.
He further explained that, in line with the Company Income Tax, the VAT was meant to be deducted before making payments, compensations or commission to company distributors.
Fowler disclosed that, the discovery by the FIRS on the non-remittance of VAT has necessitated the deadline binding on all companies; especially those dealing with fast-moving consumer goods, bringing to their notice that, all compensations made to distributors in the form of commission and reimbursement through any means of payment; be it cash or credit note, as well as goods-in-trade must be subjected to VAT and Withholding Tax (WHT) system at the appropriate rate.
He added that all VAT payments must be remitted by companies on or before the 21st of every month.
Investigations reveal that the Value Added Tax is calculated at a flat rate of 5 percent on all goods and services sold in Nigeria. The WHT, on the other hand, is a system aimed at tracking down task payers as well as incomes which may not be reported by them.
Section 7 of the VAT Act confers the power of administration of VAT on the FIRS, a Federal Tax Agency.