The Federal Inland Revenue Service (FIRS) has offered taxpayers with outstanding foreign currency tax liabilities a one-month window to settle such liabilities in naira payment with effect from March 1 to March 31, 2022 .
Muhammad Nami, the FIRS executive chairman, who disclosed this in a public notice, clarified that the concession was a one-off opportunity as the law provides that the currency in which a taxpayer transacts a business is the currency with which the tax is to be paid.
According to him, the concession became necessary given concerns raised by some taxpayers about their challenges in sourcing foreign exchange to offset outstanding tax liabilities.
“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 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,” he stated.
Nami further explained that the window covers all tax liabilities that became 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,” he said.
To benefit from the opportunity, taxpayers within the category are expected to make all payments before March 31, 2022 and forward relevant documents relating to the transaction together with the evidence of payment to the office of the FIRS executive chairman, and a copy submitted to the local tax office where the taxpayer’s file is domiciled.