Update on Covid-19 Tax Palliatives to Support Taxpayers

The Federal Inland Revenue Service (FIRS) reassured the public that it would waive all penalties and interests for all taxpayers as long as they pay their debt in full on or before 31^st May, 2020. This palliative was conveyed through the FIRS Public Notice dated 30^th April, 2020.

The FIRS greatly emphasized the need to make payments on or before 31^st May, 2020 for this palliative to apply.

Tax Palliatives already in Force

The FIRS announced various palliative measures to support individuals and companies in light of unforeseen challenges that followed the outbreak of the Covid-19 pandemic in Nigeria. We have outlined them below, for your ease.

FIRS First Palliatives of March 23, 2020

The FIRS Chairman via a letter notified the public that the timeline for filing VAT and WHT returns was extended to the last working day of the month following the month of deduction.

By his letter:

i. the due date for filing of Companies Income Tax returns was also extended by one month (revised due date of filing); and

ii. taxpayers could also file their returns without audited accounts as long as the relevant audited accounts would be unfailingly submitted within 2 months of the revised due date of filing.

Press Release of April 6, 2020

By this Press Release, the FIRS:

i. waived Late Returns Penalty (LRP) for taxpayers who pay early and file later;

ii. gave taxpayers facing challenges sourcing for FOREX for the purpose of offsetting their liabilities the option of paying in Naira at the prevailing Investors & Exporters (I & E) FOREX window rate on the day of payment;

iii. extended the period for filing Personal Income Tax returns for Foreign Affairs, Non-Residents, Military and Police to 30th June, 2020;

iv. extended the date of remitting VAT from the 21^st of every month to the last day of the month; and

v. suspended field audits, investigations and monitoring visits till further notice.

Press Release of April 22, 2020

By this Press Release, the FIRS appealed to taxpayers whose sectors are experiencing boom and a significant increase of income in these times, for a high level of cooperation in payment of their taxes.

The special appeal was to encourage such taxpayers to make special arrangements to pay their taxes. The FIRS suggested the special arrangement of paying annual returns earlier than the due date apart from normal monthly obligations.

Sectors specified by the FIRS include Telecommunication Companies, Financial Institutions, E-Commerce, Supermarkets, Manufacturers/ Processors of some products, etc. The FIRS was of the strong belief that taxpayers in these sectors are experiencing boom due to increased transactions as a result of the lockdown or even despite the pandemic.

Electronic/ Online Alternatives Available to Taxpayers

A recurring theme of the FIRS updates to the public on Covid-19 related matters is the need for taxpayers to make use of its electronic/online platforms for various activities such as payment of taxes, processing of tax clearance certificates and submission of tax returns.  

The FIRS encourages taxpayers to take advantage of its simple, user-friendly and robust e-filing process to submit all documents online instead of visiting the tax offices. The dedicated email addresses for each of its offices are available on its website.

Taxpayers already registered to the e-filing platform are at liberty to submit all returns via efiling.firs.gov.ng and alternatively to submit their returns via email. Taxpayers are also encouraged to engage with the FIRS via electronic mail or on the contact centre 0909 74444444 OR 0909 71111111.

For desk reviews and tax audits, the FIRS has proposed the creation of a portal where relevant documents would be uploaded by taxpayers for online access by the tax authority.

Other Relevant Information

The Federal Government through the Minister of Finance, Budget and National Planning announced on April 6, 2020 that circulars and Ministerial Orders will be issued to ensure that charitable donations by companies to support the government’s efforts in the containment of the COVID-19 pandemic are tax deductible, pursuant to Section 25 of the Companies Income Tax Act.

#StaySafe!

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