The Federal Inland Revenue Service (FIRS) has released a public notice on the submission of a certificate of acceptance. Section 3 of the Industrial Inspectorate Act, Cap. I8, LFN 2004 (as amended), provides that any person incurring Qualifying Capital Expenditure (QCE) of NGN500,000 and above must obtain a Certificate of Acceptance from the Industrial Inspectorate Division of the Federal Ministry of Industries, Trade, and Investment (FMITI). FIRS intends to rely on the provisions of the Industrial Inspectorate Act for QCE and its powers to call for documents from taxpayers.
Therefore, FIRS has mandated that all companies that claimed capital allowances on QCE (of NGN500,000 and above) between 2016 and 2021 years of assessment should submit the Certificate(s) of Acceptance issued by the Industrial Inspectorate Division of the FMITI. Taxpayers must submit the Certificate(s) of Acceptance to the corresponding FIRS office by 31st October 2022.
Where a company fails to comply with this notice, FIRS may withdraw the capital allowances claimed for the relevant years of assessment and raise additional tax on the company. A company with taxable profits will have to forfeit the relief and pay tax on the disallowed amount. Obtaining a certificate of acceptance of fixed assets (CAFA) is tedious. It may take between 3 months to 12 months or even more before the certificate is issued.
Henceforth, CAFA will be mandatory for claiming capital allowance on a QCE in an assessment year. BRC has helped several companies to process and get CAFA. If you want to know more about how we can assist your business, contact us.