The Federal Inland Revenue Service (FIRS) has announced that it will embark on a nationwide value-added tax (VAT) and withholding tax (WHT) compliance monitoring exercise from October 23, 2023. The exercise is aimed at ensuring that all taxable persons or tax agents, including non-governmental organisations (NGOs), ministries, departments, and agencies (MDAs) of governments at the federal, state, and local levels, are complying with their tax obligations and remitting the correct amount of VAT and WHT to the government.
According to a statement issued by the FIRS Executive Chairman, Zacch Adedeji, on Monday, the exercise is in line with Sections 2, 8, 26, and 29 of the Federal Inland Revenue Service (Establishment) Act 2007 (as amended). He said that teams of officers from the service shall visit selected taxpayers and taxable persons (including companies, NGOs, or MDAs) to review their VAT and WHT records. The exercise shall cover 2019 to 2022 accounting years for taxable persons whose records have been audited by the service up to the 2018 accounting year. For those whose records have not been audited up to 2018, the exercise shall be extended to include the prior years that have not been audited.
Adedeji also stated 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. He added that taxable persons or tax agents who shall be visited for the VAT and WHT compliance monitoring exercise will be notified by the FIRS, and the documents required for the exercise will be listed in the letter to selected entities.
The FIRS Chairman said that the exercise is part of the efforts of the service to enhance tax compliance and revenue collection in the country. He urged all taxpayers and taxable persons to cooperate with the service and comply with their tax obligations. He also warned that failure to do so would attract penalties and sanctions as prescribed by the law.