close
Share with your friends

COVID-19: FIRS announces waiver of interest and penalty on outstanding tax liabilities

COVID-19: FIRS announces waiver of interest and penalty

COVID-19: FIRS announces waiver of interest and penalty on outstanding tax liabilities

1000
Wole Obayomi

Partner & Head, Tax, Regulatory & People Services

KPMG in Nigeria

Contact

Related content

Covid-2

The FIRS today, Thursday, 30 April 2020, issued a Public Notice announcing its decision to waive interest and penalties on outstanding tax debts arising from desk reviews, tax audits and investigations. However, to be eligible for the relief, the affected taxpayers must settle their outstanding tax debts in full by 31 May 2020.

The announcement follows its earlier palliative measures and those of other agencies of the Federal Government to mitigate the impact of the Coronavirus (COVID-19) pandemic on taxpayers, as published in our Tax Alert Issue 3.6|March 2020 and Tax Alert Issue 4.2|April 2020.

Comments

We commend the FIRS for its commitment to alleviating the impact of the COVID-19 pandemic on businesses. The waiver of interest and penalties on outstanding tax liabilities is a welcome development in light of the negative impact of COVID-19 pandemic on taxpayers.

However, the deadline of 31 May 2020 to make full payment of outstanding tax debts may be challenging as most businesses are currently experiencing loss of revenue and cashflow constraints. Therefore, some taxpayers who genuinely want to take advantage of the relief may not have the financial resources to make full payment before the 31 May 2020 deadline. The FIRS should, therefore, consider extending the deadline to allow such taxpayers to pay their principal tax liabilities in instalments as their cashflow permits within the shortest time possible.

Meanwhile, the relief does not cover disputed tax audit liabilities in respect of which affected taxpayers have ascertained their undisputed tax positions. The FIRS should address this category of taxpayers who may want to take advantage of the relief and remit their undisputed tax liabilities pending resolution of their disputes with the FIRS. This would increase FIRS’ collection and relieve the affected taxpayers’ cashflow of the associated cost of penalty and interest.

Please click here to read the FIRS’ Public Notice and here to access KPMG Business Impact Series on COVID-19.

For further enquiries, please contact:

Wole Obayomi
ng-fmtaxenquiries@ng.kpmg.com

© 2020 KPMG Professional Services, a partnership registered in Nigeria and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal