July 11, 2020
On 8th July, 2020, the Federal Inland Revenue Service (“FIRS or the Service”) issued a Public Notice informing taxpayers of its decision to grant additional extension on the waiver of penalties and interests on outstanding tax debts to 31st August, 2020.
This extension is FIRS’s latest response to the outbreak of the COVID-19 Pandemic in Nigeria as the FIRS had previously announced that taxpayers had to pay their outstanding tax liabilities before 31st May, 2020 to enjoy a waiver of penalty and interest. This timeline was initially extended to 30th June, 2020. (Read our tax alert on this here) and has now been extended by two months (i.e. till 31st August, 2020).
The Public Notice specifically states that the extension of the waiver of interest and penalties applies to debts arising from:
The Notice also states that there will be no further extension of the waiver. It also directs that taxpayers with additional enquiries should contact the Tax Controllers of the offices where their tax files are domiciled or the nearest FIRS Regional Debt Management Office.
The extension of the waiver on interests and penalties by the FIRS is commendable considering the numerous constraints which companies are faced with as a result of the effects of the COVID- 19 Pandemic.
Given the repeated extensions, it is important for defaulting taxpayers to defray their outstanding tax liabilities, taking advantage of the extended timeline provided by the FIRS. This is especially critical as the Notice clearly states that there will be no extension beyond the new date of 31st August, 2020. It should be noted that the new date of 31st August, 2020 means that there will only be four months left to year-end by the expiry of the new timeline and the FIRS may be compelled to close all outstanding tax debt cases for the year. Following from the above, it is advisable for taxpayers to engage their tax advisors to review their tax status and ensure that where they have outstanding debts they are able to explore the extended window to offset such debts in order to enjoy the waiver of penalties and interests.