The Federal Inland Revenue Service (FIRS) on Tuesday put up a publication (see below) declaring a partial tax “amnesty” for corporate tax payers. According to the publication, a tax amnesty will be granted from October 5 2016 and will run for the next 45 days.
It is expected to cover full waiver of penalty and interest on tax liabilities for 2013 to 2015. Penalty and Interest are typically added to tax liabilities by the FIRS, if it concludes that taxes were not paid on time. This sometimes run into millions and is usually at the discretion of the Inland Revenue to waive it or not. From experience, the FIRS typically waves these taxes if it is being paid by a tax payer that is not already in the tax net. It is also waved for businesses that are evidently cash constrained.
How to take advantage of it
- A taxpayer will be required to apply to the FIRS
- In the application, they must make a commitment of an immediate payment of at least 25% of the tax due while the balance may be paid subsequently in installments.
- They did not specify how many installments
- According to comments from PWC Tax Blow, “it is not clear whether the period referred to is accounting or tax years and whether taxpayers who are already undergoing audit for the specified period can opt in”.
- The also added that”, taxpayers will be keen to know what will happen in case they have exposures for periods before 2013 given that the statute of limitation, where applicable, is up to 6 years.”
Source: FIRS
