The Federal Inland Revenue Service (FIRS) has announced the following additional measures to further manage the impact of the Coronavirus disease (COVID-19) on taxpayers.
The measures include: waiver of late returns penalty for taxpayers who pay their tax liabilities early but submit their tax returns later.
Evidence of tax payment can be forwarded to the relevant FIRS e-mail address, or submitted later to the appropriate tax office.
FIRS has also extended timeline for remittance of VAT from the 21st day to the last day of the month, following the month of deduction; taxpayers facing challenges in sourcing foreign exchange (FOREX) to settle tax liabilities on their Forex-denominated transactions are permitted to pay the Naira equivalent, based on the prevailing Investors & Exporters FOREX window rate on the day of payment.
The FIRS also extended personal income tax (PIT) returns filing deadline for personnel of Foreign
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Affairs, Military and Police, and non- resident persons by three months to June 30, 2020 and indefinitely suspended all field tax audit, investigation and monitoring visits.
Following the paliative measures, KPMG expects the FIRS to continue to review the COVID-19 situation and introduce additional palliative measures for business survival in this challenging time.
“We commend the FIRS for introducing additional measures to help reduce the effects of COVID-19 on taxpayers. While, the phrase “early payment” was not defined, it can be taken to mean payment in advance or by the last due date for payment.
“However, beyond granting waiver of penalty and interest in such instance, the FIRS should consider waiver of interest and penalty where a taxpayer files its tax returns by the due date, but is not in a position to fully pay its tax liability at once due to the severe impact of COVID-19 on its cashflow. France, Netherlands, Austria and Belgium are examples of countries that have announced plans to waive interest and penalty on any late payment of income taxes during the pandemic”, KPMG tax experts said in their April 20 note.
“We also laud the FIRS for permitting companies to settle their Forex-denominated tax liabilities in Naira. At the same time, the FIRS should be willing to allow such taxpayers the flexibility to pay their tax liabilities in instalments if they are not liquid enough to make the payment in a lump sum.
“Lastly, the extension of PIT filing deadline and indefinite suspension of field tax audit, investigation and monitoring visits by the FIRS are steps in the right direction given the need to maintain social distance in order to curtail the spread of COVID-19”, KPMG stated further.
