On 7 November 2022, the Federal Inland Revenue Service (FIRS) issued a Public Notice (the “Notice”) requiring certain companies to withhold VAT on taxable supplies from their vendors and remit to the Service. This is in line with the recent amendment to the Value Added Tax Act (VAT) Act, which empowered the FIRS to appoint any person to withhold or collect VAT and pay the tax by the 21st of the following month.
The appointment of MTN, Airtel and deposit money banks to deduct and remit VAT from their vendors is expected to provide intelligence to improve tax compliance, resulting in increased revenue for the government. However, it is unclear why the FIRS did not appoint other mobile network operators. This may be viewed as increasing compliance costs for the affected companies and impacting their competitiveness from an industry perspective.
Please read more in our Tax Alert Below:
Download PwC Tax Alert - FIRS appoints Telcos and Banks to withhold VAT