The Federal Inland Revenue Service (FIRS) has issued a 14-day ultimatum to all taxable persons or tax agents who have made deductions of Value Added Tax (VAT) or Witholding Tax (WHT) on behalf of the service to immediately remit such deductions.

The Executive Chairman, FIRS, Dr. Zacch Adedeji, issued the directive in a statement yesterday.

He said the service would embark on a nationwide VAT and WHT compliance monitoring exercise with effect from Monday, October 23, 2023, adding that its teams of officers shall visit selected taxpayers, taxable persons (including companies, NGOs or MDAs) to review their VAT and WHT records.

Adedeji, explained that the exercise would cover 2019 to 2022 accounting years for taxable persons whose records have been audited by the service up to 2018 accounting year.

He said for taxpayers whose records had not been audited by the service up to 2018, the exercise shall be extended to include the prior years that have not been tax audited.

According to the FIRS boss, taxable persons or tax agents who shall be visited for the VAT and WHT compliance monitoring exercise will be notified by the service, adding that the documents required for the exercise will be listed in the letter to selected entities.

He explained that the move was pursuant to Sections 2, 8, 26 and 29 of the Federal Inland Revenue Service (Establishment) Act 2007 (as amended).

The notice was directed to all taxable persons or tax agents including Non-Governmental Organisations (NGOs), Ministries, Departments and Agencies (MDAS) of governments at the federal, state and local levels.

The federal government raked in a total of N709.59 billion from VAT in the first quarter of the year (Q1 2023), according to the National Bureau of Statistics (NBS).

On the aggregate, consumption tax grew by 1.75 per cent quarter-on-quarter to N709.59 billion, compared to N697.38 billion in Q4 2022.

For VAT, local payments accounted for N436.10 billion, while foreign VAT stood at N151.13 billion as well as import VAT which contributed N122.37 billion in Q1.

According to the statistical agency, on quarter-on-quarter basis, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the highest growth rate with 349.86 per cent, followed by construction with 95.64 per cent.

On the other hand, activities of extraterritorial organisations and bodies had the lowest growth rate at 53.54 per cent, followed by real estate activities at 47.01 per cent.

In terms of sectoral allocation, the top three largest VAT contributors included manufacturing with 29.65 per cent; information and communication with 19.29 per cent; and mining and quarrying with 12.24 per cent.

Conversely, activities of extraterritorial organisations and bodies recorded the least share with 0.02 per cent, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 0.03 per cent; and water supply, sewerage, waste management, and remediation activities with 0.04 per cent.

However, on a year-on-year basis, VAT collections in Q1 2023 increased by 20.56 per cent compared to Q1 2022. (THISDAY)

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