Follow Us on Google
The Federal Inland Revenue Service (FIRS) says all companies must remit value-added tax and withholding tax by the 21st day of every month.
According to a statement signed by Babatunde Fowler, the FIRS chairman, some companies have been found not to deduct these taxes at source.
VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain – from production to the point of sale.
Withholding tax, however, is deducted at source by organisations or bodies making payments to suppliers of goods and services. They are required to remit the deducted sum to the tax authority as payments are being made to suppliers/vendors.
“It has come to the notice of the service that some companies do not deduct WHT/VAT from the compensation paid to their distributors contrary to provisions of the ‘Companies Income Tax (Rates, Etc. Deduction at Source (Withholding Tax) Regulations and Paragraph 3.8 of Federal Inland Revenue Service Information Circular No. 2006/02 of February 2006, which states that commission earned by distributors/dealers will be subjected to WHT and VAT,” he said.
