FIRS FURTHER EXTENDS DEBT PAYMENT WINDOW FOR WAIVER OF INTEREST AND PENALTIES

The Federal Inland Revenue Service (“FIRS” or “the Service”) through a press statement has extended the closing date of its waiver of penalty and interest on outstanding tax liabilities from 30 June 2020 to 31 August 2020. The tax debt payment window is a limited time period for taxpayers to settle their outstanding tax debts in order to enjoy the waiver of accumulated penalty and interest. The extension is a follow up to several palliative measures being rolled out by the FIRS to cushion the effects of the COVID-19 pandemic on individual and corporate taxpayers.

 

Highlight of the press statement

The FIRS had previously extended the tax debt payment window by one month from 31 May 2020 to 30 June 2020. The waiver applies to debts arising from:

  • Tax audit, tax investigation, and desk review assessments
  • Approved installment payment plans under Voluntary Assets and Income Declaration Scheme (VAIDS)

Taxpayers are now required to pay their outstanding liabilities before 31 August 2020 to be eligible for a waiver of accumulated penalty and interest. The FIRS has emphasized that there would be no further extension of the deadline.

 

Key takeaway

The extension of the tax debt waiver window is a demonstration of the FIRS’ resolve to encourage taxpayers to settle all outstanding tax debts and ameliorate the impact of the COVID-19 pandemic on the businesses. Taxpayers are therefore advised to take advantage of this time limiting opportunity to resolve all outstanding tax disputes in order to take advantage of the waiver of penalties and interests on outstanding tax debts.