Experts Fault FIRS Over New Tax Payment Policy
Business News (Finance) – Some tax experts have faulted the Federal Inland Revenue Serviceâ€™s (FIRS) recent decision to collect tax from taxpayers before a self-assessment form is filed.
The Federal Inland Revenue Service, in an advert, recently requested payment of taxes before self-assessment of tax form is filed to the service.
Following this development, tax experts said the discerning taxpayer should treat such notice with caution.
Eben Akinyemi, Partner, at the transactions and tax advisory firm, Stransact Partners said: â€œIt is curious to note that the FIRS did not mention the 2011 Tax Administration (Self- Assessment) regulations. This is the regulation that the FIRS relies on to demand payment of taxes before filing of returns on self-assessment basis.â€
Briefing financial journalists recently on this development from the side of FIRS, Akinyemi, who is also an Associate of the Institute of Chartered Accountants of Nigeria said:
â€œThe Federal Inland Revenue Service (FIRS) placed a paid advertisement requesting payment of taxes. That regulation cited section 55 of the Companies Income Tax Act (CITA) 2004 (as amended), Laws of the Federation of Nigeria CAP C21. The section cited stipulates the time within which a company is to file its returns.
This is essentially within 6 months of financial year end for an existing business. The FIRS then proceeded to demand payment of taxes beginning from January 2013 and final payment to be made on or before 30 June 2013 for companies whose financial year end is after 31 July 2012.â€
Akinyemi also said: â€œThe FIRS relied on Section 61 of the FIRS Establishment Act (FIRS Act), to issue the 2011 Tax Administration (Self Assessment) Regulations in December 2011. The Regulations made specific pronouncements on the Companies Income Tax Act (CITA), the Personal Income Tax Act (PITA), the Petroleum Profits Tax Act (PPTA), and the Value Added Tax Act (VATA) among others.â€
He added: â€œSection 77 of CITA already makes specific provisions on time within which tax (including Provisional Tax) is to be paid. It is queer that the FIRS did not cite this section in the advertisement placed in the paper.
Indeed this is the right place where the tax payer will find guidance on when to pay his taxes and not FIRS notices. Section 77(5) expressly states that â€œA company filing self assessment shall pay the tax due within two months from the date of filing the assessment in one lump sum or such number of monthly installments (not being more than six) as may be approved by the Board.â€-Leadership