FIRS GRANTS FURTHER TAX PALLIATIVES
The FIRS noted that the disruption to businesses and destruction of properties is coming when the economy is still struggling to recover from the adverse impact of the COVID-19 pandemic
Highlights of the Public Notice
The window for the waiver of penalty and interest on outstanding tax liabilities which elapsed on 31 August 2020 has been further extended to 31 December 2020. Hence, companies that seek to benefit from this waiver are expected to pay in full, the principal portion of their outstanding liabilities between now and 31 December 2020. The outstanding liabilities could have resulted from self-assessment or government assessment arising from desk audit, field audit or investigation exercise.
Further, the FIRS reiterated that certain palliative measures previously introduced are still in place. These include:
- Extension of monthly WHT remittance and VAT returns filing to the end of the month;
- Taxpayers who earn their revenue in Naira but are facing challenges in sourcing foreign exchange (forex) to settle outstanding tax liabilities can offset their tax liabilities in Naira at the prevailing Investors & Exporters (I & E) Forex window rate on the day of payment.
Key takeaway
The waiver of penalty and interest on outstanding tax debts by the FIRS is timely. Also, the additional tax palliatives will go a long way to demonstrate the FIRS’ sensitiveness and resolve to provide relief to taxpayers, ease the process of tax compliance and minimize the cost of tax compliance. Taxpayers are therefore advised to take advantage of this palliative by settling the principal portion of their outstanding tax debts within the specified time frame.
Although, the palliative is available to taxpayers, we expect that the FIRS will introduce a set of well-structured palliative measures like deferred tax payment, suspension/delay of ongoing/scheduled tax audits etc. that would be directed at businesses that suffered losses as a result of the violence that erupted following the EndSARS protest.