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Taxation

Income Tax Returns: FIRS Extends Due Date For Companies Till 31st August 2022

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FIRS Calls For Increased Collaboration Within African Countries To Effectively Tax Digital Businesses

Olushola Okunlade Writes

The filing of Companies Income Tax Returns for the 2022 Year of Assessment, due on 30th June 2022, has been extended to 31st August 2022, for companies who were unable to meet up with the deadline as of the end of June 2022.

The extension of this deadline is contained in a Press Release issued by the Federal Inland Revenue Service (FIRS), and signed by the tax authority’s Executive Chairman, Muhammad Nami, where it noted that it had taken this decision after receiving “numerous calls from companies for the extension of time to submit the Companies Income Tax (CIT) returns for the 2022 year of assessment falling due on 30th June 2022.”

The release stated that as a measure of goodwill by the Service and in line with relevant provisions of the Companies Income Tax Act, it had directed that all Companies whose Companies Income Tax returns for the 2022 Year Of Assessment, that fall due between 30th June and 31st August 2022 (both days inclusive), were given up to 31st August 2022 to submit their returns to the Service.

It went further to state that the extension is a one-off gesture by the Service for only the 2022 Year of Assessment on Company Income Tax Returns and that Companies who filed within this period of extension would not be subject to Late Filing Penalty or interest for late payment.

“The relevant Company Income Tax returns shall, therefore, not attract Late Filing Penalty or interest for late payment if submitted to the Service on or before 31st August 2022;

“Where relevant Company Income Tax returns are not filed by the extended date, penalty and interest for late payment shall be computed from the original due date and not the extended date;” the release read.

Mr. Nami however explained that the extension only applies to the filing of Companies Income Tax Returns but does not extend to other taxes.

“This extension of the filing date is only for CIT and does not include returns for withholding tax, value-added tax, personal income tax (PAYE), etcetera.”

The Service called on the relevant taxpayers to take the opportunity of this extension to submit their Companies’ Income Tax Returns and pay their due taxes within the specified time of an extension.

Taxation

Post-VAIDS: JTB, FIRS Commences Full-Scale Enforcement On Defaulters

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Nami Charges Professional Tax Bodies On Contribution To Tax Development In Nigeria

By Moninuola Sulaiman

Upon the effluxion of the amnesty provided by the Voluntary Assets and Income Declaration Scheme (VAIDS) set up by the Federal Government of Nigeria through the Federal Ministry of Finance, the Joint Tax Board (JTB) in collaboration with the Federal Inland Revenue Service (FIRS) would immediately commence a “full-scale Enforcement Exercise” on defaulting taxpayers. 

In a Public Notice, titled: “Post-VAIDS Enforcement and Prosecution Exercise,” and signed by Muhammad Nami, the Executive Chairman FIRS, who doubles as the Chairman JTB, the tax bodies stated that a full-scale Enforcement Exercise, including prosecution is to commence immediately on defaulting taxpayers who did not take advantage of the Scheme (VAIDS). 

“The Joint Tax Board (JTB) in conjunction with the Federal Inland Revenue Service (FIRS), is embarking on a full-scale Enforcement Exercise, including prosecution of those defaulting taxable persons who did not take advantage of the Scheme,” the notice read. 

“The defaulting Taxpayers will be assessed to tax in accordance with the relevant provisions of the Tax Laws.” 

Taxpayers who had outstanding tax liabilities which had previously been declared under the Scheme were encouraged to pay up their outstanding liabilities immediately to avoid having the reliefs granted by the Scheme withdrawn.

It is recalled that the Voluntary Assets and Income Declaration Scheme (VAIDS), Executive Order No. 004 of 2017, provided an opportunity for taxpayers who were in default of tax liabilities to voluntarily declare their assets and income, and pay taxes due on them, and in return obtain amnesty from prosecution among other benefits for a 12 month period from the 1st of July, 2017. 

The scheme also provided that upon taking advantage of the amnesty, tax reliefs such as immunity from prosecution for tax offenses, immunity from a tax audit, waiver of interest, waiver of penalties, and the option of spreading payment of outstanding liabilities over a maximum period of three (3) years would be available. 

The Executive Order had however stated that the consequence of failure to comply with the scheme would be met with liabilities for the offending taxpayer, including the liability to pay in full the principal sum, as well as to pay all penalties and interests that have arisen. This also included a comprehensive tax audit for the taxpayer and withdrawal of reliefs granted. 

This Post-VAIDS Enforcement and Prosecution Exercise is coming on the heels of a Post-VAIDS Stakeholders’ Webinar held on 6th June 2022 and organised by the FIRS.

During the Webinar, the Service used the opportunity to explain to stakeholders including consultants and taxpayers the background and successes of the scheme.

The Executive Chairman, FIRS, Muhammad Nami during the webinar noted that according to data from the National Bureau of Statistics, over 68 million businesses were active in Nigeria, while less than 20 million of these were active taxpayers. 

He noted that this gap in compliance needed to be bridged through enforcement of compliance, and that the Post-VAIDS activities were an avenue for businesses and individuals to voluntarily declare their assets and income, and register to pay tax or face full enforcement action by the Service.

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Taxation

Nami Charges Professional Tax Bodies On Contribution To Tax Development In Nigeria

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Nami Charges Professional Tax Bodies On Contribution To Tax Development In Nigeria

…“Our professional bodies need to speak on matters of tax policies and tax laws, especially on proposals for annual Finance Bills

Olushola Okunlade Writes

The Executive Chairman of the Federal Inland Revenue Service (FIRS) Muhammad Nami has called on professional bodies in the regulation of tax practice to lead conversations on matters of tax policy and tax laws in the country.

Mr. Muhammad Nami made the call yesterday while hosting a meeting of the Council Members of the Chartered Institute of Taxation of Nigeria (CITN), the Institute of Chartered Accountants of Nigeria (ICAN), and the Association of National Accountants of Nigeria (ANAN) to discuss the implementation of an MoU on standardisation of tax practice in Nigeria.

Nami Charges Professional Tax Bodies On Contribution To Tax Development In Nigeria
Executive Chairman, FIRS, Muhammad Nami, giving his remarks during the meeting with Council Members of the Chartered Institute of Taxation (CITN), Institute of Chartered Accountants (ICAN), and the Association of National Accountants of Nigeria (ANAN) on the implementation of the MoU on standardisation of tax practice, at the FIRS HQ, Abuja. 6th July 2022.

Mr. Nami while calling for a value-based leadership approach from the councils urged the professional bodies to work hand-in-hand with the Service to deepen the FIRS institutional framework through qualitative reporting and effective representation of their clients.

“Our professional bodies need to speak on matters of tax policies and tax laws, especially on proposals to annual Finance Bills.

“We also urge you to help the Service to deepen its institutional framework through quality reporting and effective representation of clients by our professional colleagues.

“We need to stem the tides in improving financial reporting to reduce the spate of ‘copy and paste’ financial reporting system as we experience today.” Mr. Nami stated.

Nami Charges Professional Tax Bodies On Contribution To Tax Development In Nigeria
Left-Right: Registrar, ICAN, Prof. Ahmed Kumshe; CEO, ANAN, Dr. Kayode Fashua; President, ANAN, Prof. Benjamin Osisioma; Executive Chairman, FIRS, Muhammad Nami; President, ICAN, Tijanni Musa Isa; President, CITN, Adesina Adedayo; Registrar, CITN, Adefisayo Awogbaje; in a group photo at the FIRS HQ, Abuja. 6th July 2022.

Speaking further, the FIRS Executive Chairman who is also a Fellow of two of the three professional bodies explained that on the part of the FIRS, the tax authority had adopted renewed strategies to tackle financial reporting concerns.

Mr. Nami noted that the FIRS had created new departments such as the Intelligence, Strategic Data Mining, and Analysis Department, the Special Crimes Department, the Tax Incentives Management Department, and the Emerging and Special Taxes Department, which he stated are at the forefront of unraveling financial reporting issues through data mining.

He also noted that the FIRS alongside State Inland Revenue Services is collaborating with the National Identity Management Commission (NIMC) to build a databank to improve tax investigation.

Other strategies include the accreditation of tax consultants and auditors in the FIRS, the review of data from Automatic Exchange of Information as well as increased enforcement actions.

The Presidents of the three bodies, Professor Benjamin Osisioma of ANAN, Mr. Tijjani Musa Isa of ICAN, and Mr. Adesina Adedayo of the CITN commended the FIRS Executive Chairman for showing leadership in pushing for and enabling a resolution of the squabbles between the three bodies.

While thanking Mr. Nami for his leadership, Professor Osisioma noted that failure to cooperate among the three bodies would lead to chaos in tax practice regulation in the country.

“If we fail to cooperate and collaborate, we would destroy what we are trying to build,” he stated.

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Taxation

FIRS To Commence Nationwide Monitoring On Tax Compliance

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…Visits to include MDAs, NGOs, and other corporate bodies

Olushola Okunlade Writes

The Federal Inland Revenue Service (FIRS) has stated that it would embark on a nationwide Value Added Tax (VAT) and Withholding Tax (WHT) compliance exercise from July 2022.

This information is contained in a public notice announcing the compliance monitoring exercise and signed by the FIRS Executive Chairman, Muhammad Nami.

The exercise is coming on the heels of an earlier notice by the Service to commence the enforcement and recovery of unremitted tax deductions owed to the Federation by some States and Local Governments.

The VAT and Withholding Tax Compliance Monitoring exercise will involve teams of FIRS officers visiting selected taxpayers and taxable persons to review their VAT and Withholding Tax records.

“The Federal Inland Revenue Service (FIRS) shall embark on a nationwide VAT and WHT compliance monitoring exercise with effect from July 1, 2022,” the notice reads.

“As a result, teams of officers from the Service shall visit selected taxpayers, taxable persons (including companies, NGOs or MDAs) to review their VAT and WHT records.”

In the notice, Mr. Muhammad Nami also highlighted that the exercise will cover the 2016 to 2020 accounting years for taxable persons whose records have been audited by the Service up to the 2015 accounting year.

He however noted that for taxpayers whose records have not been audited by the Service up to 2015, the exercise will be extended to include the prior years that have not been tax audited.

The Service also called on all taxable persons and tax agents to immediately remit deductions of VAT and Withholding Tax they have made on its behalf.

“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.”

The notice also stated that those who would be visited during the monitoring exercise will be notified and informed of the required documents for review beforehand.

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