FIRS commences nationwide tax compliance monitoring
By Motolani Oseni
Federal Inland Revenue Service (FIRS) has concluded plans to commence a nationwide Value-Added Tax (VAT) and Withholding Tax (WHT) compliance monitoring exercise for all taxable individuals effective 23 October 2023.
The Acting Executive Chairman of the FIRS, Zacch Adedeji, in a statement explained that the initiative is designed to improve tax compliance and revenue collection across the country.
Value Added Tax (VAT) is a consumption tax applied to a product when value is added at various points in the supply chain, starting from production and ending at the point of sale.
The Withholding Tax (WHT) on the other hand, is deducted at the source by organisations or entities when making payments to suppliers of goods and services.
The entities are mandated to remit the deducted amount to the tax authority during payments to suppliers or vendors.
Dr Adedeji, noted that the monitoring exercise is in accordance with the FIRS Act of 2007 adding that it is intended to widen the tax net.
The FIRS Acting Executive Chairman clarified that for taxpayers whose records have not been audited by the agency up to 2018, the exercise will be extended to include the preceding unaudited years.
According to him, taxable individuals or tax agents who are subject to the VAT and WHT compliance monitoring initiative will be duly notified by the FIRS, and the necessary documents and requirements for the exercise will be outlined in the communication sent to the selected entities.
“Pursuant to Sections 2, 8, 26, and 29 of the Federal Inland Revenue Service (Establishment) Act 2007 (as amended), notice is hereby given to all taxable individuals or tax agents, including Non-Governmental Organisations (NGOs), Ministries, Departments, and Agencies (MDAs) of governments at the Federal, State, and Local levels.
“The Federal Inland Revenue Service (FIRS) will undertake a nationwide VAT and WHT Compliance monitoring exercise commencing on Monday, October 23, 2023.
“As a result, teams of officers from the Service will visit selected taxpayers, taxable persons (including companies, NGOs, or MDAs) to review their VAT and WHT records.”
The Nigeria’s apex revenue collection agency boss, further stated that the exercise will encompass the accounting years from 2019 to 2022 for taxable individuals whose records were audited by the Service up to the 2018 accounting year.
“All taxable individuals or tax agents who have made deductions of VAT or WHT on behalf of the Service are required to promptly remit all such deductions to the FIRS within two weeks of this announcement”, he stated.
READ ALSO: Coalition urge President to reward NSCDC CG with…
In 2022, the Federal Inland Revenue Service has announced that it collected over N10.1 trillion in tax revenue.
The collection which covered both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues was slightly below the 2022 target of N10.44 trillion.
The FIRS under the present dispensation aims to surpass its preceding year’s figure and extend the record this year.
