FIRS

The Central Bank of Nigeria (CBN) has been urged to assist the Federal Inland Revenue Service (FIRS) to track the electronic payment of Value Added Tax (VAT) made by foreign entities that are not registered in Nigeria.

According to the FIRS which is currently soliciting the partnership of the apex bank in this regard, the plan will facilitate its 3-year strategic revenue growth initiatives for 2019 through to 2021.

The FIRS has recently been paying a lot of attention on VAT as an alternative means to growing its revenue generation. Under the current VAT legislation, online purchases are subject to VAT payment.

However, the FIRS has been losing VATs paid for online purchases, because such payments are typically made electronically; even as the FIRS has no means of tracking it.

Also note that a lot of foreign entities that are not registered in the country have recently been making a lot of online purchases.

It is, therefore, as part of the bid to recover the VATs accruing from such transactions, that the the FIRS is asking the Central Bank of Nigeria and the Federal Ministry of Finance, to work out framework that will ensure that the observed loophole is fixed.

The FIRS is specifically looking at the potential use of a software that will electronically recover the Value Added Taxes paid via online purchases. This could be achieved with the help of any of the following: Nigerian Interbank Settlement System, Master Card, Verve, and Visa, etc.

The FIRS is also asking regulators to “leverage the provisions of Section 38 of the VAT Act” by issuing a regulation that would expand the scope of “goods and services” to encompass landed properties such as buildings and even oil wells, as well as intangible goods and services such as software.

The document containing these requests was recently submitted to the National Assembly by the Federal Inland Revenue Service.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.