Wednesday, July 08, 2020 / 07:02 PM / by KPMG Nigeria / Header Image Credit: KPMG Nigeria
The Federal Inland Revenue Service (FIRS) has announced extension of the deadline for waiver of penalty and interest on outstanding tax liabilities to Monday, 31 August 2020. The waiver relates to tax liabilities arising from desk reviews, tax audits, tax investigations, and approved instalment payment plans under the Voluntary Assets and Income Declaration Scheme (VAIDS).
The announcement follows FIRS' earlier extension of the deadline for the palliative from 31 May 2020 to 30 June 2020 published in our Tax Alert Issue No. 6.1 of June 2020.
From all indications, this is the final concession for affected taxpayers as the FIRS has stated that there would be no further extension of the deadline.
The further extension of the waiver by the FIRS is a welcome development and demonstrates its commitment to easing the financial impact of the pandemic on taxpayers. As companies are gradually returning to full operations, the additional time would enable more taxpayers to take advantage of the waiver to settle their outstanding tax liabilities.
It is hoped that the ongoing tax audit reconciliation exercises will be concluded timeously to enable more taxpayers to take advantage of the waiver before 31 August 2020. Therefore, it behoves taxpayers with pending audit issues to proactively work with the FIRS to resolve their outstanding tax issues with a view to closure and payment of their outstanding liabilities before the final deadline.
It is further hoped that the FIRS will consider extending the concession to taxpayers who have ascertained their undisputed tax positions but are yet to resolve their disputed liabilities with the FIRS. This will enable such taxpayers to take advantage of the relief pending resolution of their disputes with the FIRS. Further, the FIRS should revisit its decision to apply the extended deadline to taxpayers under VAIDS, especially those whose approved payment plan extends beyond 31 August 2020.