|By Sehubo Festus
FIRS will begin tracking VAT and WHT compliance by October 23.
The Federal Inland Revenue Service (FIRS) has declared its plan to initiate a nationwide monitoring exercise for Value-Added Tax (VAT) and Withholding Tax (WHT) compliance among all eligible individuals, starting from October 23. Zacch Adedeji, the chairman of FIRS, highlighted in a statement released on Monday via X (formally Twitter) that this measure aims to reinforce tax adherence and enhance revenue generation across the country.
VAT is a consumption tax applied to products when value is added at various points in the supply chain, beginning from production and concluding at the point of sale. Conversely, WHT is deducted at the source by organizations or entities when making payments to suppliers of goods and services. These organizations are required to remit the deducted amount to the tax authority during transactions with suppliers or vendors.
Adedeji underscored that this monitoring exercise is in accordance with the FIRS Act of 2007 and will take effect from Monday, October 23, 2023.
“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 Organizations (NGOs), Ministries, Departments, and Agencies (MDAs) of governments at the Federal, State, and Local levels,” he stated.
“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.
“This 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.”
Adedeji explained that the exercise will be expanded to encompass the previous unaudited years for taxpayers whose records have not been examined by the agency up until 2018.
“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,”
The tax authority further emphasized that individuals or tax agents subject to the VAT and WHT compliance monitoring initiative will receive official notifications from the FIRS. The communication sent to the selected entities will include detailed information on the required documents and necessary procedures for the exercise.