- The Federal Inland Revenue Service (FIRS) has issued Information Circular No. 2023/01 on the operation of VAT withholding regime in line with the provisions of the Value Added Tax (VAT) Act Cap VI LFN 2004 (as amended).
- The circular contains guidelines on withholding and self-accounting of VAT. Section 10(3) of the VAT Act requires a taxable person to whom a taxable supply is made in Nigeria to withhold VAT on transactions with Non-Residents and remit same to the Service.
- Section 13(1) of the VAT Act requires all ministries, statutory bodies or other agency of government (MDAs) to deduct or withhold and remit VAT on all payment made to contractors and remit same to the Service.
- Section 13(2) of the VAT Act empowers the Service to, by notice determine and direct companies in the oil and gas sector to deduct or withhold VAT at source.
- Section 14(3) of the VAT Act empowers the Service to appoint any person to deduct or withhold VAT; and the person so appointed shall remit the VAT deducted or withheld to the Service in the currency of transaction.
- Section 14(4) of the VAT Act requires a person to whom taxable supply is made in Nigeria to self-account for the VAT payable on the transaction where VAT is not charged on the invoice. A company having obligation to withhold the VAT charged on invoices of all taxable supplies received shall remit same to the Service in line with this Circular.
- The circular also outlines the obligations of companies under the legal framework specified in Paragraph 1.0, including obligation to collect VAT, file returns, and remit VAT collected to the Service, as well as obligation to withhold VAT from suppliers and remit same to the Service.
Source Orbitax
