FIRS launches nationwide tax compliance exercise starting October 23

FIRS launches nationwide tax compliance exercise starting October 23
FIRS launches nationwide tax compliance exercise starting October 23

The Federal Inland Revenue Service (FIRS) has announced its plans to initiate a nationwide compliance monitoring exercise for value-added tax (VAT) and withholding tax (WHT) for all taxable entities, effective October 23, 2023.

According to Zacch Adedeji, the Chairman of FIRS, this move is aimed at improving tax compliance and revenue collection within the country.

Tax compliance exercise

VAT is a consumption tax imposed on products at various stages of the supply chain, from production to the point of sale.

On the other hand, WHT is deducted at the source by organizations or bodies making payments to suppliers of goods and services, and they are required to remit the deducted amount to the tax authority as payments are made to suppliers or vendors.

Adedeji clarified that this monitoring exercise is in accordance with the FIRS Act of 2007 and will officially commence on October 23, 2023.

In his statement, Adedeji said, “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 persons or tax agents, including Non-Governmental Organizations (NGOs), Ministries, Departments, and Agencies (MDAs) of governments at the Federal, State, and Local levels.”

“The Federal Inland Revenue Service (FIRS) shall embark on a nationwide VAT and WHT Compliance monitoring exercise with effect from Monday, October 23, 2023.”

He further added that the monitoring exercise will cover taxable persons’ records from 2019 to 2022 whose records have been audited by the FIRS up to the 2018 accounting year.

For those whose records haven’t been audited up to 2018, the exercise will be extended to include prior years that have not been audited.

Adedeji emphasized that all taxable persons or tax agents who have deducted VAT or WHT on behalf of the FIRS must remit these deductions immediately within two weeks of the publication.

The FIRS will notify taxable persons or tax agents subject to the VAT and WHT compliance monitoring exercise, specifying the required documents for the procedure in a letter to the selected entities.