Analysts at KPMG Nigeria, a leading auditing firm in Nigeria has identified inconsistence in a recent declaration by the Federal Inland Revenue Service (FIRS) on further implementation of voluntary assets and income declaration scheme (VAIDS).
The FIRS on June 2, 2020 extended the deadline for waiver of penalty and interest (P&I) on outstanding tax liabilities arising from desk reviews, tax audits and investigation to Tuesday, 30 June 2020.
The announcement follows its earlier COVID-19 palliative measures No.3 published in our Tax Alert Issue No. 4.4 of April 2020.
Further, the FIRS has expanded the scope of the outstanding tax liabilities covered in the earlier notice to include liabilities from self-assessments and the approved installment payment plans under the voluntary assets and income declaration scheme (VAIDS).
Taxpayers in default of the approved VAIDS installment payment plan are encouraged to take advantage of the extension, or risk withdrawal of the waivers granted to them on approval of their VAIDS applications, such as waiver of P&I and exemption from tax audit and investigations.
In a commentary Wednesday, the analysts at KPMG Nigeria commended the FIRS for extending the deadline for waiver of interest and penalty on outstanding tax liabilities.
“This is necessary as some companies are still grappling with cashflow challenges after returning to partial business operations following the easing of the lockdown imposed to curtail the spread of the COVID-19,” they noted.
They however punctured the new move pointing out that it negates some provisions of the executive order on the VAIDS of 2017.
“By including liabilities arising from VAIDS, the FIRS did not consider the provisions of the Executive Order (on the VAIDS) of 2017, which grant taxpayers a maximum period of three years to spread payments made under the VAIDS.
“Consequently, it is uncertain how the FIRS intends to enforce the withdrawal of the exemption granted to taxpayers who have approved payment plan that extends beyond the 30 June 2020 deadline,” they pointed out.
According to the experts, the updated notice also did not address the category of taxpayers with disputed tax liabilities who have ascertained their undisputed tax positions and may wish to take advantage of the relief pending resolution of their disputes with the FIRS.
