FIRS automates VAT filing and collection system, for certain businesses

The Federal Inland Revenue Service (FIRS) recently issued a Public Notice (the Notice), informing the general public of its automated Value Added Tax (VAT) collection system for Branded Shops, Super Stores, General Supermarkets, Standard Restaurants and Eateries, nationwide.

In this regard, the automated VAT Platform, called VATrac, would become the approved channel for all VAT returns filing and payment processing for the aforementioned businesses, effective 1 April 2020.  According to the FIRS, the VATrac has been designed to operate with standard Point of Sales (POS)/Fiscal machines.

The launch of VATrac is a welcome development as it should simplify the VAT compliance process and reduce time spent by taxpayers in fulfilling their VAT obligations.  The FIRS had previously created e-platforms for filing of various tax returns and processing of remittances.  For instance, The Integrated Tax Administration System (ITAS) was set up to handle corporate tax filings, electronic tax clearance certificate processing and withholding tax processing, among others. 

However, the ITAS platform has not been fully operational due to server/system downtime and other bureaucratic bottlenecks. Taxpayers, therefore, still have to file returns manually with the tax authorities. We expect the FIRS to have put these challenges into consideration to ensure the implementation of VATrac is successful.

Taxpayers affected by this Public Notice should:

  • Liaise with the relevant FIRS office to be connected to the system
  • Ensure transactions/sales to customers contain basic information such as Taxpayer Identification Number, Print Date, Goods/Product Description, Receipt Number, Grand Total amount billed to customer and VAT Applied.
  • Ensure they are prepared for the new VAT collection system. Please click on this link to access the Public Notice.

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