The Federal Inland Revenue Service (FIRS) on Tuesday announced a one-month grace with effect from the 1st of March, 2022, to 31st March, 2022 to taxpayers with outstanding foreign currency tax liabilities to settle the liabilities in Naira.
The tax agency stated the grace period in a Public Notice signed by its Executive Chairman, Muhammad Nami.
The Service stated that the gesture was partly due to requests and enquiries from taxpayers on challenges being encountered by them in sourcing foreign currencies to offset their outstanding tax liabilities.
It stated: “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 1st of March, 2022 to 31st of March, 2022.”
According to the agency, the concession is a one-off window as the law has stated that the currency a taxpayer transacts in is the currency with which the tax is to be paid.
It further clarified: “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
“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”, FIRS added.
It pointed out that the benefit from the fiscal gesture was that taxpayers within this category are expected to make all payment before 31st March, 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.
