Ministries, Departments, Agencies, and contractors operating in the Federal Capital Territory of Nigeria have been asked by the FCT-IRS to properly submit Withholding Tax.
According to FCT-IRS, WHT for limited liability organizations is paid to the Federal Inland Revenue Service, whereas WHT for businesses and independent contractors is paid to either the state’s internal revenue service or FCT-IRS.
They emphasized the need of taxpayers to comprehend tax jurisdiction regulations and reported having seen cases where MDA desk personnel input the incorrect tax jurisdiction on the Government Integrated Financial Management Information System platform.
In a statement released on Sunday by its spokesman, Mr. Mustapha Sumaila, they claimed that this may cause contractors to lose WHT credit and relevant tax agencies to lose money.
They stated that Ministries, Departments, and Agencies, as well as contractors, should correctly remit withholding taxes, highlighting the fact that many organizations have inadvertently sent withholding taxes intended for the FCT-IRS to other tax authorities.
FCT-IRS highlighted that whereas WHT for businesses and individual contractors is sent to the Internal Revenue Services of states or to FCT-IRS, WHT for limited liability corporations is sent to the Federal Inland Revenue Service.
We’ve seen cases where MDAs’ desk officers enter the incorrect tax jurisdiction on the GIFMIS platform.
“This mistake could result in contractors losing their WHT credit and the applicable tax authorities losing money.
“It is also possible to refuse the WHT credit to the WHT beneficiary.”
The FCT-IRS then admonished all MDA desk officers to guarantee accurate data entry at the point of beginning in order to avert such losses.
“We also want to alert businesses and individual contractors in the FCT to this problem and warn them of the possible repercussions.”
They issued a warning that they wouldn’t issue Tax Clearance Certificates on WHT credits that the GIFMIS platform had accidentally forwarded to other tax jurisdictions.
“We recommend that every taxpayer work closely with their individual MDA desk officers to make sure that the right tax jurisdiction is chosen during WHT remittance so we can ensure a streamlined tax administration system that encourages compliance, fosters business-friendly conditions and preserves the values of transparency and accountability.”
