FIRS extends the filing deadline for Income Tax Returns by one month

FIRS extends filing deadline for Income Tax Returns by one month

The Federal Inland Revenue Service (FIRS) has issued a public notice (the Public Notice) to extend by one month, the deadline for filing the income tax returns of companies whose returns were due on 30 June 2021; the new due date of filing such income tax returns is now 31 July 2021. This applies to tax returns prepared based on financial statements for the year or period ended 31 December 2020.

FIRS also suspended the late returns filing penalty and interest for late payment that should have accrued, provided the returns are filed on the new TaxPro-Max platform within the extended deadline.

Further, FIRS extended the deadline for validating and uploading withholding tax (WHT) credit notes on TaxPro-Max from 30 June 2021 to 31 July 2021. The Public Notice also communicated improvements made to the TaxPro-Max platform such as:

  • Activation of payment on account option pending an assessment,
  • Extension of the validity of payment reference number (PRN) generated on TaxPro-Max till midnight of the due date of the returns (this was previously midnight of the date PRN is generated), and
  • Enablement of branch tax identification number for making value added tax and withholding tax payments.

Recall, that FIRS had issued a public notice communicating that with effect from 7 June 2021, all naira denominated tax returns are to be filed strictly on TaxPro-Max. Similarly, FIRS had notified taxpayers of a deadline of 30th June 2021 for validating and uploading WHT credit notes. According to FIRS, the extension of these deadlines is due to the teething challenges faced by taxpayers in filing their tax returns and validating their WHT credit notes for uploading by FIRS’ officials on TaxPro-Max.

The extension of filing timeline reflects FIRS’ responsiveness to the challenges encountered by taxpayers with respect to usage of the TaxPro-Max platform. However, the decision to make taxpayers forfeit their rightful WHT credit notes simply because they were not validated during a window created for administrative purposes raises legal concerns which FIRS is yet to address.

Additionally, the Public Notice brings some issues to the forefront:

  • Although not explicitly stated, the extension of income tax returns is expected to automatically cover all taxes/returns relating to income tax for companies such as tertiary education tax (TET), capital gains tax (CGT), national information technology development levy (NITDL) and transfer pricing returns (TP) returns
  • While the rationale stated by FIRS for extending the filing deadline did not consider companies that were not required to file on TaxPro-Max, (e.g. companies rendering income tax returns in foreign currency), such companies appear to have been covered under the extension
  • FIRS’ comment to suspend interest on late tax payment due to the extension appears redundant. Interest on income tax is only due on unpaid assessment. Therefore, even without the extension, companies who did not file their tax return due to the extended deadline could not have been exposed to interest on income tax payment as there would have been no unpaid assessment.

Companies that were unable to file their tax returns or upload their WHT credit notes on TaxPro-Max by the due date of 30 June 2021 are urged to take advantage of this extended deadline to avoid incurring any penalty or “interest”.

Please click here to download a copy of the Public Notice.

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