The Federal Inland Revenue Service (FIRS) has announced its intention to launch a nationwide Value-Added Tax (VAT) and Withholding Tax (WHT) compliance monitoring exercise for all taxable individuals, commencing on October 23.
According to a statement released on Monday by Zacch Adedeji, the FIRS chairman, this initiative is designed to bolster tax compliance and revenue collection within the nation.
VAT is a consumption tax applied to a product when value is added at various points in the supply chain, starting from production and ending at the point of sale.
Conversely, WHT is deducted at the source by organizations or entities when making payments to suppliers of goods and services.
They are mandated to remit the deducted amount to the tax authority during payments to suppliers or vendors.
Adedeji emphasized that this monitoring exercise is in accordance with the FIRS Act of 2007 and will be effective from Monday, October 23, 2023.
Adedeji clarified that for taxpayers whose records have not been audited by the agency up to 2018, the exercise will be extended to include the preceding unaudited years.
The tax authority also pointed out that taxable individuals or tax agents who are subject to the VAT and WHT compliance monitoring initiative will be duly notified by the FIRS, and the necessary documents and requirements for the exercise will be outlined in the communication sent to the selected entities.
