FIRS flags off nationwide tax compliance exercise October 23

The Federal Inland Revenue Service (FIRS) says it will begin a nationwide compliance exercise on value-added tax (VAT) and withholding tax (WHT) on taxable persons from October 23.

Mr Zacch Adedeji, the FIRS Chairman said in a statement on Monday that the latest exercise is in accordance with the FIRS Act of 2007 aimed at enhancing tax compliance and revenue collection in the country.

VAT is a consumption tax administered by FIRS revenue generated is disbursed to the three tiers of government through the Federation Account Allocation Committee (FAAC).

Persecond News gathered that Nigeria generated N1.49trn as the aggregate revenue from value-added tax (VAT) in the first half of 2023, according to data from the National Bureau of Statistics (NBS).

The figure represents a 25 percent increase compared to the N1.18trn generated in the first half of 2022.

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 Organisations (NGOs), Ministries, Departments and Agencies (MDAs) of governments at the Federal, State and Local levels,” he said.

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

The FIRS Chairman said the teams of officers from the Service will visit selected taxpayers, taxable persons (including companies, NGOs or MDAs) to review their VAT and WHT records.

On the other hand, Withholding Tax (WHT) is a tax method used to collect income tax in advance and it is deducted at varying rate ranging from 5% to 10% depending on the transaction.

Adedeji added: “The exercise shall cover 2019 to 2022 accounting years for taxable persons whose records have been audited by the Service up to 2018 accounting year.

“All taxable persons or tax agents who have made deductions of VAT or WHT on behalf of the Service are required to immediately remit all such deductions to the FIRS within two weeks of this publication.”