With the global outbreak of the novel Coronavirus (COVID- 19 or the Pandemic), Federal Inland Revenue Service (FIRS) has released a public notice (the Notice), informing the general public of the launch of its “business continuity plan” (BCP). The BCP is expected to mitigate the impact of the Pandemic on taxpayers, FIRS’ staff, stakeholders, other visitors and the revenue generation aspirations of the Federal Government.
According to the Notice, FIRS has put in place the following measures to reduce the impact of the Pandemic on businesses and other economic activities of taxpayers:
- The due date for filing Companies Income Tax (CIT) returns has been extended by one month.
- Taxpayers can file their CIT returns with FIRS without an audited account, provided that the audited accounts are filed within two months after the revised due date of filing.
- Timeline for payment of withholding tax and filing of value-added tax returns has been extended from the 21st of every month to the last working day of the month.
- To minimise contact with FIRS, taxpayers can either submit their returns on the FIRS e-portal or via designated emails based on the categorisation of such taxpayers by FIRS.
- All meetings of FIRS’ staff with taxpayers are to be limited to a maximum of 10 people at any time.
- For desk reviews and tax audits, FIRS will publish information requests on its website and create a portal where requested documents can be uploaded by the taxpayer.
The BCP is a very commendable move by FIRS as it tries to comply with global best practices in light of the COVID-19 pandemic. However, the Notice made no reference to the:
- The obligation of organisations to file transfer pricing returns 6 months after financial year-end. Even though this may be implied from the extension of the filing deadline for income tax returns, a specific statement on TP returns would be desirable considering the significance of the late filing penalty
- Obligations of Nigerian financial institutions to submit returns of “Reportable Accounts” under the Income Tax (Common Reporting Standard) Regulations. The first set of returns is due to be submitted to FIRS on or before 31 May 2020, and the ability of financial institutions to meet this deadline may also be impacted by the Pandemic.
- Obligation to file Petroleum Profits Tax (PPT) and other taxes not expressly covered under the Notice. Considering that it is not all taxes that are specifically covered, it would be ideal that FIRS clarifies the position on these other taxes in order to prevent uncertainty
- Payment of tax. The Notice is also silent on whether the tax payments can also be delayed to meet the extended deadline for filing returns. However, it is arguable that this is direct consequence of filing tax returns and payment may follow filing of tax returns.
Therefore, we expect FIRS to consider including these other returns and statutory obligations in the extension of deadlines, given that the recent developments affects all businesses.
In the meantime, taxpayers are encouraged to take advantage of the various online platforms to carry out their tax obligations while minimising physical contact. We expect that the various platforms would be properly managed by FIRS to achieve the intended objectives of the BCP.
Please click here to access the Notice.