Site icon Nigerian NewsDirect

FIRS releases conditions for MTN, Airtel, Banks to collect, remit VAT

Following appointment of leading network service provider and banks in the Country to take a special service of revenue collection for Nigeria’s revenue agency, the Federal Inland Revenue Service (FIRS), the latter has released guidelines and the conditions to meet for the telecommunications firms and banks to meet their obligations.

The development trails the appointment of the telecommunications firms including MTN and Airtel, as well as Money Deposit Banks to withhold Value Added Tax (VAT) charged on taxable supplies made to them and remit same to the tax agency.

Details of the development is contained in a Public Notice the FIRS issued by the Executive Chairman, Mr. Muhammad Nami, as disclosed in a statement by Mr. Johannes Wojuola, Special Assistant to the Chairman on Media & Communication, in Abuja on Monday.

Nami giving the conditions was quoted as saying, “This Notice is given to all persons carrying on trade, profession or business of any kind, tax practitioners and the general public that, with effect from 1st January, 2023; in line with 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 supplies made to them: MTN; Airtel; and all money deposit bank as defined by the CBN Guidelines.”

He noted that the companies were expected to remit the tax they would withhold on or before the 21st day of the month immediately following the month the tax was withheld, in the format prescribed by the Service.

“The companies shall remit the tax withheld or collected, in the currency of transaction, to the Service on or before the 21st day of the month immediately following the month the tax was withheld or collected;

“The tax withheld or collected under this notice shall be remitted in the format prescribed by the Service but separately from VAT due on the companies’ taxable supplies,” the Chairman directed.

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

“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 may utilise the amount refundable to offset future VAT liability or request for a cash pay-out,” he further explained.

The FIRS, he said, has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement, while also stating that input tax claims, which include refunds, were subject to the limitations imposed by Section 17(2)(a) of the VAT Act.

Exit mobile version