The Federal Inland Revenue Service (FIRS) has authorised MTN, Airtel and Deposit Money Banks (DMBs) to withhold Value Added Tax (VAT) charged on all taxable supplies made to them and remit to the Service.
What this means is that these entities are now mandated to deduct VAT from their contractors for goods and services supplied and remit the charges to the FIRS.
A statement from the FIRS in Abuja said the Executive Chairman of the Service, Muhammad Nami, “explained the role of the companies as well as the obligations of their suppliers with regards to the withholding of Value Added Tax”.
According to the FIRS: “All persons carrying on trade, profession or business of any kind, tax practitioners and the general public that, with effect from 1st January, 2023; in line with the provisions of Section 14(3) of the Value Added Tax Act Cap. V1 LFN 2004 (as amended), the following companies are appointed to withhold or collect VAT charged on all taxable supplies made to them”.
The FIRS boss specifically mentioned MTN, Airtel and all Deposit Money Banks (DMBs) “as defined by the CBN Guidelines” as lead business entities authorized to collect VAT for the Service.
The FIRS noted that “these companies were expected to remit the tax they would withhold on or before the 21st day of the month immediately following the month the tax was withheld, in the format prescribed by the Service.
“The companies shall remit the tax withheld or collected, in the currency of transaction, to the Service on or before the 21st day of the month immediately following the month the tax was withheld or collected.
The Service noted that “the tax withheld or collected under this notice shall be remitted in the format prescribed by the Service but separately from VAT due on the companies’ taxable supplies.”
The FIRS also stated the options that are available to suppliers of these companies whose output tax will be withheld.
It further noted that the Service has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement, while also stating that input tax claims, which include refunds, are subject to the limitations imposed by Section 17(2)(a) of the VAT Act.
Credit: thenationonlineng.net
