July 27, 2018
On 24 July 2018, the Federal Inland Revenue Service (FIRS) issued a Public Notice (PN) addressed to taxpayers with annual turnover of N1 billion and above. Based on the PN, the FIRS will prosecute taxpayers (falling within the income bracket of N1 billion and above) who have failed to remit their taxes.
According to the FIRS, the PN was issued as a follow-up to the recently concluded Voluntary Assets and Income Declaration Scheme (VAIDS). FIRS stated that it was aware that certain companies, partnerships and enterprises with annual turnover of N1 billion and above were still non-compliant with respect to tax remittances. It directed that such non-compliant taxpayers should immediately remit all taxes due.
Amongst other things, the FIRS mandated the following:
FIRS concluded by stating that in the event of non-compliance with the PN, it will explore all legal means to recover all tax liabilities without further recourse to taxpayers.
Although the PN suggests that the FIRS’ intention is to investigate and recover taxes due from non-compliant taxpayers, some companies that have since been complying with the relevant provisions of the tax laws have also received letters relating to the above. Although this would constitute additional compliance burden on taxpayers who have albeit been complying with the tax laws, it would seem that the FIRS is using this strategy to bring all potential taxpayers into its tax net.
We are also aware that the FIRS issued certain provisional assessments and notices for property valuation to taxpayers. It would appear that the issuance of such letters is a strategy by the FIRS to identify non-compliant taxpayers who failed to take advantage of the VAIDS, in order to bring them into the tax net. Since the FIRS appears to be issuing these notices to taxpayers regardless of their compliance status, it would be advisable for taxpayers, who have been compliant, to contact their tax consultants to engage the FIRS in this regard.
We have commenced discussions with the FIRS about these provisional assessments and letters. We will also continue to monitor developments to enable us to issue relevant updates in this regard.