Wed, Nov

FIRS Approves VAT Collection By MTN, Others

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The Federal Inland Revenue Services (FIRS) has permitted telecommunications companies such as MTN and Airtel, and Deposit Money Banks (DMBs) to deduct Value Added Tax (VAT), charged on all taxable supplies (goods and services) made to them and remit the VAT to the tax agency. This was made known in a statement signed by the Executive Chairman, FIRS, Muhammad Nami, which “explained the role of the companies as well as the obligations of their suppliers with regards to the withholding of Value Added Tax”.

The statement reads, “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 Deposit Money 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 utilize the amount refundable to offset the future VAT liability or request for a cash pay-out”.