Network service providers in Nigeria like MTN, Airtel, and others, as well as banks in Nigeria created for depositing money have been ordered by the Federal Inland Revenue Service (FIRS), to withhold all Value Added Taxes (VATs) which are always charged on all the supplies which are made, and forward same to the FIRS.
This development was disclosed in a public notice shared on Monday, 7th November by the Executive Chairman of FIRS, Muhammad Nami.
According to the notice, the duties of the companies and organizations which are to comply with the order, were adequately explained in respect to the withholding of VAT.
The public notice read thus: “This Notice is given to 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: MTN; Airtel; and all money deposit banks—as defined by the CBN Guidelines.”
“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 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.”
“A supplier whose output tax is withheld, as provided in this notice, may deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies,
“And where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilise the amount refundable to offset future VAT liability or request for a cash pay-out.”
