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FIRS offers concession to taxpayers with outstanding liabilities

THE Federal Inland Revenue Service (FIRS) has given taxpayers with outstanding foreign currency tax liabilities a one-month window to settle those liabilities in Naira.

According to FIRS, the window runs from March 1, 2022, to March 31, 2022.

The FIRS stated in a public notice signed by its Executive Chairman, Muhammad Nami, that it had received requests and inquiries from taxpayers regarding difficulties in obtaining foreign currencies to offset their outstanding tax liabilities.

“In view of the number of requests, enquiries and the challenges encountered by the taxpaying public in sourcing for foreign currencies to offset outstanding tax liabilities, the Federal Inland Revenue Service (“the Service”) wishes to inform our esteemed taxpayers that a one-month window has now been opened for this category of taxpayers to settle their foreign currency tax liabilities in Naira with effect from the 1st of March, 2022 to 31st of March, 2022,” the Notice read.

The Service explained that this was a one-time exception because the law stipulates that the currency in which a taxpayer transacts is the currency in which the tax must be paid.

“The extant provision is that the currency of the transaction should be the currency with which the tax is paid. However, this is a one-off window/concession, and the Service would no longer entertain any such request from the taxpaying public.”

The Notice further stated that: “The applicable rate shall be the Investors and Exporters (I&E) Foreign Exchange Rate of the Central Bank of Nigeria (CBN) prevailing on the date of the transaction and or when the tax obligation falls due”.

The window covers all such liabilities that are due for payment on or before December 31, 2021, and all taxes except the Petroleum Profit Tax.

“This concession is available to all taxpayers, covers all tax types, and all foreign currency tax liabilities falling due on or before 31st December 2021, except for companies in the Upstream (Oil & Gas) Sector, and the Petroleum Profits Tax.”

To take advantage of this, taxpayers in this category must make all payments by March 31, 2022, and upon payment, the relevant transaction documents, as well as proof of payment, must be forwarded to the Office of the Executive Chairman, with a copy sent to the local tax office where the taxpayer’s file is domiciled.

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