FIRS to embark on VAT and WHT Compliance Monitoring Exercise Nationwide
Furthermore, the Federal Inland Revenue Service (FIRS) has announced its intention to initiate a nationwide Value Added Tax (VAT) and Withholding Tax (WHT) compliance monitoring exercise, with FIRS Executive Chairman, Zacch Adedeji, revealing that this initiative will kick off on October 23.
VAT, a consumption tax managed by the FIRS, sees its revenue distributed among the three tiers of government through the Federation Account Allocation Committee (FAAC).
According to data from the National Bureau of Statistics (NBS), Nigeria generated a significant N1.49 trillion in aggregate revenue from VAT in the first half of 2023, marking a 25 percent increase compared to the N1.18 trillion generated in the first half of 2022.
Adedeji emphasized that the primary goal of this exercise is to ensure taxpayers’ compliance with their tax obligations, as well as the accurate remittance of VAT and Withholding Tax to the government.
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To achieve this, a dedicated team of officers from the FIRS will visit selected taxpayers and taxable entities, which include companies, Non-governmental organizations (NGOs), and Ministries Departments and Agencies (MDAs), to review their VAT and Withholding Tax records.
In addition, Adedeji outlined that this monitoring exercise will span the years from 2019 to 2022 for taxable entities whose records were audited by the service up to the 2018 accounting year.
On a related note, Withholding Tax (WHT) is a taxation method designed to collect income tax in advance, with deductions ranging from 5% to 10% based on the transaction.
Adedeji also pointed out that this initiative would encompass the 2019 to 2022 accounting years for taxable entities whose records were audited by the Service up to the 2018 accounting year.
He further stressed that “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.”
