The Federal Inland Revenue Service (FIRS) on 23 March 2020 announced the following tax relief measures to address the impact of the coronavirus (COVID-19) pandemic on taxpayers:
- Extension of the due date for filing of value added tax (VAT) and withholding tax returns from the 21st day of the month to the last business day of the month, following the month of deduction
- Use of electronic platforms for paying taxes and processing tax clearance certificates
- Electronic filing of tax returns by taxpayers
- Filing of tax returns by taxpayers without audited financial statements which must be submitted within two months of the revised due date of filing
- Submission of tax returns online by taxpayers via efiling.firs.gov.ng or by designated e-mail accounts published by the FIRS.
In addition, an “Emergency Economic Stimulus Bill, 2020” was passed by the House of Representatives (HoR) to:
- Grant a tax rebate of 50% of the actual amount due or paid as pay-as-you-earn tax, to Nigerian companies who retain all their employees from 1 March 2020 to 31 December 2020.
- Suspend import duties on medical equipment, medicines and personal protective gears required for treatment and management of COVID-19 for three months, effective 1 March 2020. This has been further extended by the Honourable Minister of Finance to 30 September 2020. Introduce a new moratorium on mortgage obligations of Nigerians under the National Housing Fund.
The Bill is yet to be passed by the Senate.
The FIRS announced the following additional measures to mitigate the impact of COVID-19 on taxpayers:
- Waiver of late returns penalty for taxpayers who pay their tax liabilities early but submit their tax returns later. Evidence of tax payment can be forwarded to the relevant FIRS e-mail address, or submitted later to the appropriate tax office.
- Extension of timeline for remittance of VAT from the 21st day to the last day of the month, following the month of deduction.
- Taxpayers facing challenges in sourcing foreign exchange (FOREX) to settle tax liabilities on their FOREX-denominated transactions are permitted to pay the Naira equivalent, based on the prevailing Investors & Exporters FOREX window rate on the day of payment.
Delta State Board of Internal Revenue recently announced the waiver of interest and penalties on outstanding tax liabilities arising from tax audits carried out on private primary and secondary schools, eateries and hotels from 2011 to 2019 financial years. However, the outstanding principal tax liabilities are to be settled by 30 September 2020.
In addition, the following incentives were approved for other taxpayers in the State:
- payment of outstanding tax liabilities in instalments for taxpayers on case by case basis;
- waiver of penalties for late payment of liabilities under the Pay-As-You-Earn Scheme that was due during the COVID-19 lockdown in the State from 1st April 2020 till 31st October 2020;
- waiver of penalties due on the late filing of the year 2020 annual tax returns;
- waiver of interest and penalties on additional tax liabilities arising from 2009 to 2015 tax audit exercises for taxpayers who can settle the outstanding principal amount by 31st December 2020.
Bayelsa State Board of Internal Revenue announced the following incentives for taxpayers in the State:
- Extension of the deadline for filing Form A returns for taxpayers to 30 September 2020.
- Waiver of interest and penalty for all outstanding Pay-As-You-Earn (PAYE) tax remittances until 31 August 2020.
- 50% discount on the personal income tax (PIT) assessment as contained in the State’s Minimum Harmonised Tax Rates for the informal sector for 2020 year of assessment.
- 35% discount on pool betting tax for 2020 year of assessment.
Kebbi State Board of Internal Revenue announced the following incentives for taxpayers in the State:
- Suspension of the implementation of the new rates, fines and levies under the Revenue Administration Law of the State, which is currently under review, for a period of one year from the date it is signed into law.
- Waiver of interest and penalty that may arise from extension of the filing due date.
- 100% waiver of annual development levy for every taxable person in the State for 2020 year of assessment.
- Waiver of 50% of accrued interest and penalty on outstanding tax liabilities of corporate entities.
- Waiver of 30% of all tax liabilities outstanding for a year and above for individuals under PIT assessment.
The Ogun State Internal Revenue Service recently issued a Public Notice communicating the following palliatives for taxpayers in the State:
- Extension of the deadline for filing of 2019 income tax returns by individuals to 30 September 2020.
- Extension of the deadline for filing of annual PAYE tax returns to 30 September 2020.
- Waiver of interest and penalty for late filing of 2019 annual PAYE returns during the approved extension period.
- Waiver of interest and penalty for late remittance of monthly PAYE returns from January 2020 to September 2020.
- Waiver of interest and penalty for late payment of direct assessment/ PIT by self-employed individuals in 2020.
- Adoption of video conferencing as the default mode for conducting tax audit reconciliation committee meetings.
Lagos Internal Revenue Service announced the following additional palliatives for implementation in the State:
- Approval of instalment payment of outstanding liabilities on case-by-case basis to ease the cashflow challenges that taxpayers are currently facing.
- Waiver of penalty for late payment of Pay-As-You-Earn liabilities for March – May 2020.
- Waiver of penalties due for late filing of 2020 annual tax returns (Form A).
- Waiver of interest and penalty on additional tax liabilities arising from 2009 to 2015 tax audit exercise for taxpayers who commit to a structured payment plan that terminates by 31 December 2020.
- Grant of tax credit of 20% of cash and kind donations made by resident individuals to Lagos State Government (LASG) for COVID-19 management. The credit will be available to offset 2021 year of assessment tax liabilities and subject to a cap of 35% of tax due.
- Increase in payment channels that are easier, simpler and more convenient for taxpayers.
- Adoption of video conferencing as the default mode of conducting tax audit reconciliation committee meetings.
Donation to COVID-19 Fund to be tax deductible – Minister of Finance (MoF)
The MoF, in a press statement, promised to issue an Executive Order granting additional tax reliefs to organizations that make donations to the COVID-19 fund in Nigeria. The Executive Order is yet to be issued.
Exemption of Medical Supplies from VAT and Import Duty
On 30 April 2020, the Honourable Minister of Finance, Budget and National Planning, issued a Circular exempting importers of specified medical supplies from payment of import duties and value added tax (VAT) on such items for a six-month period in the first instance, with effect from 1 May 2020.
FIRS extends AEOI-CRS filing deadline
On 19 May 2020, the FIRS announced the extension of the deadline for Financial Institutions to file their annual returns for Automatic Exchange of Information-Common Reporting Standard (AEOI–CRS) from 31 May 2020 to 30 September 2020.
Additional information regarding employment-related measures, economic stimulus measures and other meausers.