FOLLOW US ON SOCIAL

Posted On

08
November
2022

FIRS appoints MTN, Airtel, commercial banks to collect VAT,  to be deducted from source

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, issued by the FIRS on the 7th of November, signed by its Executive Chairman, Muhammad Nami.

Nami explained in the statement 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.

“This Notice is given to all persons carrying on 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 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.” 

In addition, Nami 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.

Furthermore, Nami noted that the Service has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement.

He also stated that input tax claims, which include refunds, are subject to the limitations imposed by Section 17(2)(a) of the VAT Act

RelatedPost

Related Blog post

UserComment

Valuable Users idea's
0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *