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HomeTop NewsTaxpayers with outstanding forex tax liabilities can now pay in local currency...

Taxpayers with outstanding forex tax liabilities can now pay in local currency before April 1, says FIRS

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Against the backdrop of difficulties in sourcing foreign exchange in the country, the Federal Inland Revenue Service (FIRS) on Tuesday granted a month window for taxpayers who have outstanding foreign currency tax liabilities to liquidate such liabilities in local currency.

In a statement on Tuesday, the tax agency said with effect from March 1 to March 31, 2022, tax payers could take advantage of the window of opportunity to pay their outstanding foreign exchange tax liabilities in naira.

The Public note, which was signed by FIRS Executive Chairman, Muhammad Nami, stated that it had received requests and enquiries from taxpayers on challenges being encountered in sourcing foreign currencies to offset their outstanding tax liabilities.

“In view of the number of requests, enquiries and the challenges encountered by the taxpaying public in sourcing for foreign currencies to offset outstanding tax liabilities, the Federal Inland Revenue Service (“the Service”) wishes to inform our esteemed taxpayers that a one-month window has now been opened for this category of taxpayers to settle their foreign currency tax liabilities in Naira with effect from the March 1, 2022 to March 31, 2022,” the Notice read.

The FIRS explained that this concession was a one-off window as the law has stated that the currency a taxpayer transacts is the currency with which the tax is to be paid.

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“The extant provision is that the currency of the transaction should be the currency with which the tax is paid. However, this is a one-off window/concession, and the Service would no longer entertain any such request from the taxpaying public,” the statement noted.

The Notice further stated that: “The applicable rate shall be the Investors and Exporters (I&E) Foreign Exchange Rate of the Central Bank of Nigeria (CBN) prevailing on the date of the transaction and or when the tax obligation falls due.

The Notice explained that the this window covers all such liabilities that have falling due for payment on or before 31st December, 2021, and for all taxes except the Petroleum Profit Tax.

“This concession is available to all taxpayers, covers all tax types, and all foreign currency tax liabilities falling due on or before 31st December 2021, except for companies in the Upstream (Oil & Gas) Sector, and the Petroleum Profits Tax.”

To benefit from this, the FIRS said taxpayers within this category are expected to make all payment before March 31, 2022 and upon payment, the relevant documents relating to the transaction together with the evidence of payment must be forwarded to the Office of the Executive Chairman, and a copy submitted to the local tax office where the taxpayer’s file is domiciled.

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