The Federal Inland Revenue Service has declared that it will begin a countrywide Value-Added Tax and Withholding Tax compliance monitoring exercise for all taxable individuals on October 23.
According to Nairametrics, the head of the FIRS, Zacch Adedeji, said the goal of this program, is to increase tax compliance and revenue collection across the country.
VAT is a consumption tax that is imposed on goods when value is added along the whole supply chain, from manufacture to point of sale.
In contrast, when organizations or entities pay providers of products and services, WHT is subtracted from the source.
When making payments to suppliers or vendors, they are required to remit the amount that was deducted to the tax authority.
Adedeji emphasized that this monitoring procedure would take effect on Monday, October 23, 2023, and is in compliance with the FIRS Act of 2007.
According to the statement, “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, Ministries, Departments, and Agencies of governments at the Federal, State, and Local levels,” he said.
He stated that the Federal Inland Revenue Service will start a national exercise to monitor VAT and WHT compliance on Monday, October 23, 2023.
He said, “In order to review selected taxpayers’ and taxable persons’ (including businesses, NGOs, or MDAs) VAT and WHT records, teams of Service officers will pay them a visit.
“For taxpayers whose records were audited by the Service up to the 2018 accounting year, this exercise will cover the accounting years from 2019 through 2022.”
Adedeji explained that the exercise will be expanded to include the years prior to 2018 for taxpayers whose records have not been reviewed by the government up until that point.
Within two weeks of this statement, “all taxable persons 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.”
The tax authority also noted that the FIRS will duly notify taxable persons or tax agents who are subject to the VAT and WHT compliance monitoring initiative, and that the required paperwork and specifications for the exercise will be listed in the communication sent to the selected entities.
