Federal Inland Revenue Service (FIRS) has issued a warning to defaulting taxpayers on the impending lien to be imposed on their bank accounts for non-compliance. In the publication issued, FIRS admonished business entities with annual banking turnover of ₦100million and above and those who have been collecting V
You would recall that FIRS recently instructed banks to suspend lien placed on defaulting taxpayers’ accounts for a period of 30 days, without clearly stating what will happen to the bank accounts at the expiration of the 30-day period. By this notice, FIRS has cleared all doubts on events to follow after expiration of the 30-day grace period. Please click here to access our earlier tax alert in this regard.
FIRS is empowered under Section 31 of the FIRS (Establishment) Act (FIRSEA) and Section 49 of the Companies Income Tax Act (CITA) to appoint any person to be the agent of a taxable person for the purpose of recovering tax debts from such taxable person. Also, the agent appointed may be required to pay any tax payable by the taxable person from any money held by the agent on behalf of, or due to, the taxable person. However, the FIRS power of substitution derived from the sections noted above has been greeted with widespread criticism from various stakeholders and raised a number of legal questions. Further, the approach has resulted in disruption of business operations of taxpayers and ultimately, ease of doing business in Nigeria. Please click here to access our earlier tax alert further examining the implications of FIRS’ actions.
We will continue to monitor developments in this space and provide updates as soon as they become available. Meanwhile, we advise taxpayers to continue to review their tax records and ensure full tax compliance to avoid disruption of their business operations.