FIRS appoints MTN, Airtel, commercial banks VAT collectors – Businessamlive

By Chisom Nwatu

Telecom giants, MTN and Airtel, and commercial/depository banks in Nigeria have been appointed by the Federal Inland Revenue Service (FIRS) to withhold Value Added Tax (VAT) charged on all taxable supplies which are made to them, and hand them over. at the agency.

The FIRS made this known in a statement issued by Johannes Oluwatobi Wojuola, special assistant for media and communication to the executive president of the agency.

Similarly, a public notice issued on November 7, 2022 and signed by Muhammad Nami, executive chairman of the service, said the new order will come into effect on January 1, 2023.

The notice explained the role of businesses as well as the obligations of their suppliers with regard to the collection of VAT.

“This Notice is addressed to all persons carrying out a commercial, professional or commercial activity of any kind whatsoever, tax professionals and the general public who, as of January 1, 2023; pursuant to the provisions of Section 14(3) of the Value Added Tax Act Cap. V1 LFN 2004 (as amended), the following companies are appointed to withhold or collect VAT charged on all taxable deliveries made to them: MTN; Airtel; and all money depository banks, as defined by CBN guidelines,” Nami said in the notice.

Speaking on the remittance, the head of the FIRS noted that such companies should remit the tax they would withhold no later than the 21st day of the month immediately following the month in which the tax was withheld, in the format prescribed by the Service. .

“Tax withheld or collected under this notice will be paid in the format prescribed by the Service but separately from the VAT due on taxable business supplies,” it said.

Regarding VAT recovery, Nami explained the options available to suppliers of these companies whose output tax is withheld.

“A supplier whose output tax is withheld, as provided in this notice, may deduct input tax paid on goods purchased or imported to make the taxable supply from output tax collected on other taxable supplies,” a declared the boss of the FIRS.

“And where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund can use the refundable amount to offset the future VAT liability or request a cash payment,” he explained.

In addition, the notice states that the Service has adequate measures in place to ensure prompt payment of refundable input tax under this arrangement, while indicating that input tax claims, which include refunds, are subject to the limitations imposed by Section 17(2)(a) of the VAT Act.

VAT is a consumption tax on goods and services that is levied at each stage of the supply chain where value is added, from initial production to point of sale.

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