Inheritance tax in Nigeria


Integrated tax administration system (ITAS) development

The Federal Inland Revenue Service recently launched the Integrated Tax Administration System (ITAS), a comprehensive tax administration solution which will enable the tax authority automate the tax management processes in order to serve taxpayers better.

The ITAS solution encompasses the whole tax process of:

·         Registration with the Tax Authority

·         Filing of Tax Returns

·         Payment of Tax amount Due

·         Tax Receipts and Credit notes management

·         Application for Tax Clearance certificates

Under ITAS, the Tax management process identified above will no longer be done manually but online via the FIRS website: using the following platforms:

·         E-Registration

·         E-Filing

·         E-Payment

·         E-Receipts

·         E-Tax Clearance Certificate

The consequences of adopting the electronic platform are as listed below:

·         The FIRS has ceased printing of credit notes for Tax Payers.

·         Limited Liability Companies are expected to register their details with the FIRS including a valid email address. This may require visiting the FIRS office to ensure that the company’s details on the FIRS portal are accurate and updated.

·         Once a Withholding Tax (WHT) Payment is made on behalf of a Customer/Vendor/ Supplier who is registered on the FIRS ITAS Platform, the evidence of remittance (WHT credit note) is automatically delivered to such Beneficiary via email while the Customer/Vendor/ Supplier’s account with the FIRS is also credited with the corresponding withholding tax amount.

·         This means “the onus of getting credit notes for Customers/vendors/suppliers for withholding taxes remitted, has shifted from the Bank. to the Beneficiary of the tax payment” effective January 2018.

It is therefore imperative  to sensitize Vendors / Suppliers / Customers that are limited liability companies, about the implication of adopting ITAS. Below are the new obligations and expectations from each stakeholder:

1.    Role of the Bank.

·         To educate Customers, Suppliers and Vendors (that are Ltd liability companies) of the need to register a valid email address on the FIRS Portal which will be used to receive the WHT credit notes for remittances made by the Bank on their behalf.

·         To continue to deduct and remit appropriate transactional taxes to the FIRS.

2.    Role of the Vendors/Suppliers

·         To ensure that a valid email address is registered with the FIRS on the ITAS portal. This is to ensure that notification for the withholding tax credit notes gets into their email boxes.

3.    Role of the FIRS

·         To recognize the payments received in favor of Tax payers (beneficiary/ vendor) and send the e- credit note to the email address provided by the Vendor/ Supplier on the FIRS Portal.

The most critical task rests with the Vendors/ Suppliers as stated above because failure to register or update a valid email address with the FIRS will result in non-delivery of credit notes.

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