FIRS Appoints MTN, Airtel, Others to Withhold VAT
FIRS

FIRS Appoints MTN, Airtel, Others to Withhold VAT

MTN, Airtel, as well as money deposit banks in Nigeria have been appointed by the Federal Inland Revenue Service (FIRS) to withhold Value Added Tax (VAT) charged on all taxable supplies made to them, and remit to the Service.

This is contained in a Public Notice the FIRS issued on the 1st of November, signed by its Executive Chairman, Muhammad Nami, where it explained the role of the companies as well as the obligations of their suppliers with regards to the withholding of Value Added Tax.

“This Notice is given to all persons carrying on a trade, profession or business of any kind, tax practitioners and the general public that, with effect from 1st January 2023; in line with the provisions of Section 14(3) of the Value Added Tax Act Cap. V1 LFN 2004 (as amended), the following companies are appointed to withhold or collect VAT charged on all taxable supplies made to them: MTN; Airtel; and all money deposit banks—as defined by the CBN Guidelines.”

The FIRS noted that these companies were expected to remit the tax they would withhold on or before the 21st day of the month immediately following the month the tax was withheld, in the format prescribed by the Service. READ: FIRS to Begin Nationwide Monitoring On Tax Compliance

“The companies shall remit the tax withheld or collected, in the currency of transaction, to the Service on or before the 21st day of the month immediately following the month the tax was withheld or collected;

“The tax withheld or collected under this notice shall be remitted in the format prescribed by the Service but separately from VAT due on the companies’ taxable supplies.” The notice further explained the options that were available to suppliers of these companies whose output tax is withheld.

“A supplier whose output tax is withheld, as provided in this notice, may deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies,

“And where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilise the amount refundable to offset future VAT liability or request for a cash pay-out,” the Notice explained.

It further noted that the Service has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement, while also stating that input tax claims, which include refunds, are subject to the limitations imposed by Section 17(2)(a) of the VAT Act. # FIRS Appoints MTN, Airtel, Others to Withhold VAT

Previous articleDMO Opens FGN Savings Bonds for Subscriptions
Next articleGCR Affirms UBA Ratings with Stable Outlook
MarketForces Africa, a Financial News Media Platform for Strategic Opinions about Economic Policies, Strategy & Corporate Analysis from today's Leading Professionals, Equity Analysts, Research Experts, Industrialists and, Entrepreneurs on the Risk and Opportunities Surrounding Industry Shaping Businesses and Ideas.