News - March 8, 2022

FIRS grants concession to taxpayers with outstanding foreign currency tax liabilities

Beneficiaries to pay in Naira

MEDIATRACNET

Taxpayers who have outstanding tax liabilities in foreign currency now have the opportunity to settle such liabilities following the one-month window granted by the Federal Inland Revenue Service (FIRS).

The one-month window is between March 1 and, to March 31, 2022, a public notice by the Servicesigned by the Executive Chairman, Muhammad Nami, said.

The notice said the affected tax defaulters have the added advantage of making such payments in Naira.

.The FIRS said the decision to grant the one month concession to the taxpayers followed requests and enquiries from taxpayers on challenges being encountered in sourcing for foreign currencies to offset their outstanding tax liabilities.

“In view of the number of requests, enquiries and the challenges encountered by the taxpaying public in sourcing for foreign currencies to offset outstanding tax liabilities, the Federal Inland Revenue Service wishes to inform our esteemed taxpayers that a one-month window has now been opened for this category of taxpayers to settle their foreign currency tax liabilities in Naira with effect from the 1st of March, 2022 to 31st of March, 2022,” the public notice read.

The Service said this concession was a one-off window, as the law has stated that the currency a taxpayer transacts in was the currency with which the tax would be paid.

“The extant provision is that the currency of the transaction should be the currency with which the tax is paid. However, this is a one-off window/concession, and the Service would no longer entertain any such request from the taxpaying public.”

The Notice further stated that the applicable rate shall be the approved Investors and Exporters (I&E) Foreign Exchange Rate of by the Central Bank of Nigeria (CBN) prevailing on the date of the transaction and/or when the tax obligation falls due.

The Notice explained that the concession window covers all such liabilities that have fallen due for payment on or before December 31, 2021, and for all taxes, except the Petroleum Profit Tax (PPT).

The FIRS said the concession was available to all taxpayers, and covers all tax types, and all foreign currency tax liabilities that fell due on or before December 31, 2021, except for companies in the Upstream (Oil & Gas) Sector, and the Petroleum Profits Tax.

To benefit from this concession, the FIRS said taxpayers within this category were expected to make all payment before 31st March 31, 2022, and upon payment, make the relevant documents relating to the transaction, together with the evidence of payment, available to the Office of the Executive Chairman, while a copy would be submitted to the local tax office where the taxpayer’s file is domiciled.

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