The Federal Inland Revenue Service (FIRS) has issued a Public Notice dated 17 December 2019 on a nationwide tax enforcement exercise to collect all outstanding taxes from tax defaulters. According to the notice, the recovery exercise will start on 24 December 2019. Taxpayers include individuals, partnerships, enterprises, companies, organizations, ministries, departments and agencies with outstanding taxes such as;
- Petroleum Profits Tax (PPT) – PPT is levied on the income of companies engaged in the upstream petroleum operations.
- Companies Income Tax (CIT) – CIT is a type of tax on profits accruing in, derived from, brought into or received in Nigeria. It is payable by companies registered in Nigeria and non- resident entities conducting business in Nigeria.
- Value Added Tax (VAT) – VAT is charged on the supply of taxable goods and services except for exempt or zero-rated items.
- Withholding Tax (WHT) – WHT is an advance payment of income tax, and the rate depends on the nature of the transaction.
- Tertiary Education Tax (TET) – TET is payable by all Nigerian companies on assessable profits. Non-resident companies and all unincorporated entities are exempted from tertiary education tax. The amount paid is tax-deductible for petroleum profit tax computation and not CIT computation.
- National Information Technology Development Act (NITDA) Levy – Certain companies with an annual turnover of ₦100 million and above are required to pay NITDA levy. The amount paid is tax-deductible for company income tax computation.
- Stamp Duty – Stamp duty is levied on documents as evidence of transactions between persons.
- Capital Gains Tax (CGT) – CGT is calculated on capital gains accruing to any person, whether company or individual, who disposes of an asset(s).
Furthermore, the recovery exercise covers taxes arising from;
2. Tax audit
3. Tax investigation
4. Transfer pricing audit
5. Demand notices; and
6. Any other liabilities
Tax payers can, therefore, regularize any outstanding tax liabilities within 7 days of the publication to allow smooth operations.
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