Following the disruption to businesses which followed the recent protest across Nigeria, the Federal Inland Revenue Service (FIRS) has issued a public notice (the Notice) granting an additional window for obtaining a waiver of interest and penalty on outstanding tax liabilities resulting from tax desk reviews, audit and/or investigations and self-assessments from 4 November to 31 December 2020. This waiver only applies where taxpayers settle their outstanding tax liabilities (principal amount) on or before 31 December 2020.
According to the Notice, the additional window granted for obtaining a waiver of interest and penalty on outstanding tax liabilities is necessary to provide some relief to businesses that have suffered disruptions as a result of the recent protest across the country, in addition to disruptions caused by the COVID-19 Pandemic.
The FIRS also reiterated that the following palliatives earlier granted to companies are still in place:
- Extension of the filing and payment deadline for Withholding Tax and Value Added Tax returns from 21st day of the month to the last day of the month.
- Taxpayers who earn revenue in Nigerian Naira (Naira) but are facing challenges in obtaining foreign exchange (Forex) for use in offsetting their tax liabilities can pay their outstanding tax liabilities in Naira at the prevailing Investors and Exporters (I&E) Forex window rate on the day of payment.
The palliatives introduced by FIRS is a welcome development for taxpayers as it demonstrates FIRS’ sensitivity to the disruptions experienced by businesses. Taxpayers are encouraged to take advantage of this window of opportunity to plan their tax affairs accordingly.