The Federal Inland Revenue Service (FIRS), on 22 October 2018, notified the general public that it has commenced issuance of value-added tax (VAT) certificates to all new and existing taxpayers registered for VAT purposes.
By the publication, FIRS also directed VAT collectors to display their VAT certificates at their business premises and implored taxpayers to report VAT collectors who fail to comply with this directive to the agency.
Based on the VAT Act, a taxable person is required to comply with obligations with respect to VAT, some of which have been summarised below:
- Registration with FIRS for VAT purposes. While taxpayers obtain tax identification number (TIN) upon registration with Corporate Affairs Commission (CAC), they are required to validate their registration with FIRS, for VAT filing purposes
- Charge VAT at 5% on all taxable supplies
- Remit VAT collected from customers to FIRS, through designated banks
- File VAT returns with FIRS not later than the 21st day of the month following the month of transaction.
While the public display of VAT certificates or evidence of VAT registration is not a requirement under the VAT Act, it is not clear what will happen to taxpayers who fail to display the certificates at their premises given that failure to do so does not constitute an offence under the VAT Act. This notwithstanding, we encourage taxpayers to obtain their VAT certificates from FIRS and keep them safe for easy retrieval upon request.