The FIRS in rapid-fire mode has issued three Notices to the public. The first Public Notice informs the masses that VAT implementation of the Finance Act has since commenced.
Taxpayers are thus enjoined to implement the increase of VAT from 5% to 7.5% and to take cognisance of the expanded list of VAT exempt items when making payments upon the supply of goods and services. VAT returns must also be rendered using the new rate and failure to comply would attract stiff sanctions.
FIRS informs esteemed Taxpayers through the second Public Notice that it is now in collabo with the Corporate Affairs Commission, the National Financial Intelligence Unit among other agencies to ensure that all taxpayers file and pay appropriate taxes when due. In light of this, Dormant Companies (i.e. those that formally informed FIRS that they would be temporarily out of business for at least a period of one financial year), are also advised to regularise their tax returns with the FIRS on or before June 30, 2020.
The FIRS promises to join forces with the government agencies mentioned above and legion of other agencies to beset any non-compliant Dormant company with various sanctions including placing of liens on their Bank account(s), delisting such company from the list of incorporated Companies, etc.
Lastly, the third Public Notice informs Tax Payers that the Non-Resident Persons Tax Office (NRPTO) fully commenced operations as at 1 January, 2020. All non-resident persons are thus requested to regularise their outstanding tax obligations with, and to direct their future correspondence to the NRPTO.
The third Public Notice further clarifies that a Non-Resident Person means a foreign company as defined by the Companies Income Tax Act (Section 105), or an individual as defined by the Personal Income Tax Act.
We have heard of it, read about it, debated on it, dreamt of it and prayed about it. The VAT rate in Nigeria is 7.5%. As a VAT taxable person (i.e. a person who manufactures or supplies a non VAT-exempt good or service), ensure that you charge VAT at a rate of 7.5%.
The Finance Act also increased the list of goods and services that are VAT exempt (Section 47). Ensure that you do not charge VAT on supply of such goods or services. As a consumer of supplied goods or services, ensure that you do not pay VAT on VAT-exempt goods or services. Don’t sleep on the bicycle.
On the same hand, FIRS and other government agencies did not enter the decade smiling. These Allied Forces have promised to come at any non-compliant Company from the front, back and center and Dormant Companies are not to be left out of the melee! The Deadline is June 30, 2020 for Dormant Companies to lowkey make amends with the FIRS. Don’t wait for stories that touch the soul.
Remember that the FIRS established the NRPTO sometime last year. Now the NRPTO is in business to effectively administer tax affairs of Non-Residents. Enjoy!
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