On 17 December 2019, the Federal Inland Revenue Service (FIRS) issued a Public Notice notifying all taxpayers (individuals, partnerships, enterprises, corporate organisations, ministries, departments and agencies) that are in default of tax payments that the FIRS will commence a nationwide tax enforcement exercise, effective from 18 December 2019. The tax liabilities covered under the Public Notice include those arising from self-assessment, tax audit, tax investigation, transfer pricing audit, demand notices and any other liabilities
According to the Public Notice, the nationwide tax enforcement is for the purpose of prosecuting tax defaulters and recovering all outstanding tax liabilities. The categories of tax payments covered by the enforcement notice include: petroleum profits tax, companies income tax, value added tax, withholding tax, tertiary education tax, NITDA levy, stamp duty and capital gains tax. The Public Notice also directs taxpayers to settle their tax liabilities within seven days from its publication to avoid inconveniences or interruptions in operations.
Implication
The issuance of the Public Notice is an indication of the FIRS's focus on ensuring compliance with its assessments and collecting all outstanding liabilities to meet its revenue targets and provide funds to the government. Defaulting taxpayers who have received assessments from the FIRS that are now final and conclusive could be exposed to aggressive tax enforcement action if they fail to comply with the FIRS's notice. The FIRS's enforcement action may be disruptive to their business operations and force them to immediately pay up the outstanding liabilities.
Given that the Public Notice provides a seven-day time frame for compliance, taxpayers whose tax liabilities have become due for payment are advised to immediately take proactive steps to either pay their liabilities or negotiate terms of payment with FIRS. In doing so, they should consult with their tax advisers to ensure they are properly guided.
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