Every registered business entity in Nigeria is expected to register with the FIRS (federal Inland Revenue service) to obtain a TIN (tax identification number) so as to be able to file and remit Value Added Tax, (VAT) and Withholding Tax (WHT) at the nearest FIRS office within their geo location. And in line with the Value Added Tax Act Cap V1, LFN 2004 (as amended), you must file and pay VAT and WHT tax returns not later than the 21st of every month. In line with the global share service practice, we recommend that business entities outsource this task specialized business support and management firms like Eldeotjairay so as to avoid running into problems with the relevant TAX authorities.
What is VAT?
- VAT is a consumption tax paid when goods are purchased and services rendered
- – It is a multi-stage tax
- – VAT is borne by the final consumer
- – All goods and services (produced within or imported into the country) are taxable except those specifically exempted by the VAT Act
- – VAT is charged at a rate of 5%
- – Some goods and services such as non-oil exports are zero rated
- – All taxable persons are required to file VAT monthly returns not later than 21st day following the month of transaction
- – All MDAs and Oil & Gas Companies serve dual roles as taxpayers and agents of VAT collection and are also required to file monthly returns not later than 21st day following the month of transaction
- What constitutes an Offence within the VAT administration system includes:
- Failure to register Thus; Register to file and remit Value Added Tax, (VAT) and Withholding Tax (WHT) at the nearest FIRS office, on or before 21st day following the month of transaction
- Failure to charge VAT
- Failure to issue tax invoice
- Failure to remit VAT charged
- Failure to file returns