MTN, AIRTEL, AND OTHERS ARE ALLOWED BY FIRS TO DEDUCT VAT ON SUPPLIES AT SOURCE

MTN, AIRTEL, AND OTHERS ARE ALLOWED BY FIRS TO DEDUCT VAT ON SUPPLIES AT SOURCE

MTN, Airtel, as well as money deposit banks in Nigeria have been appointed by the Federal Inland Revenue Service (FIRS) to deduct Value Added Tax (VAT) on all taxable supplies made to them at the point of payment, and remit to the service. The new development was contained in a public notice the FIRS issued on the 7th of November, signed by its chairman, Muhammad Nami, where it explained the role of the companies as well as the obligations of their suppliers with regard to the withholding of Value Added Tax.

“This Notice is given to all persons carrying on a trade, profession or business of any kind, tax practitioners and the general public that, with effect from 1st January 2023; in line with the provisions of Section 14(3) of the Value Added Tax Act Cap. V1 LFN 2004 (as amended), the following companies are appointed to withhold or collect VAT charged on all taxable supplies made to them: MTN; Airtel; and all money deposit banks—as defined by the CBN Guidelines,” the service said in a notice was published yesterday.

The companies are expected to remit the tax deducted on or before the 21st day of the month immediately following the month the tax was withheld, in the format prescribed by the service.

In the notice, FIRS explained the options that were available to suppliers of these companies whose output tax is withheld.

“A supplier whose output tax is withheld, as provided in this notice, may deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies.

“And where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilize the amount refundable to offset future VAT liability or request for a cash pay-out,” the service said.

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