On July 1, 2021, the Federal Inland Revenue Service (“FIRS”) issued a public notice granting a one (1) month extension from June 30, 2021 to businesses to comply with their tax obligations for the 2021 tax year. The public notice, titled “SUBJECT: Article 55 of the Corporate Income Tax Act (LFN C21, 2004) – Extension of the deadline for filing income tax returns for tax year 2021 (YOA)”, extends by one month the deadline for validating the withholding tax and filing tax returns for the period indicated, until the end of July 2021.
By the public notice, all companies whose tax return for the 2021 tax year expired on June 30, 2021, are granted a (single) extension of one month (with late payment penalty and interest). overdue suspended) until July 31, 2021; provided that the filing process is completed on the TaxProMax platform and the tax due is paid using the payment validity reference number (“PRN”) no later than July 31, 2021. The public notice also extends the deadline for downloading the withholding tax (“WHITE”) credit notes on the TaxProMax platform for one month, until July 31, 2021.
In addition, taxpayers are informed, in the public notice, of recent improvements made to the TaxProMax platform by the introduction of the following features:
(a) Taxpayers can now make a down payment, that is, pay a down payment while awaiting the assessment (the system will apply this advance tax payment to a future assessment);
(b) The taxpayer’s PRN remains valid until midnight of the due date for the filing of the corresponding tax declaration; and
(c) Businesses can now make payment of Value Added Tax and WHT using the branch tax ID number.
The TaxPro-Max platform was introduced by the FIRS, in accordance with the provisions of Article 25 (4) of the FIRS (Establishment) Act 2007. It is an online / electronic administrative tool provided with the aim of facilitating transparent tax administration, as it enables online tax registration, tax declaration, tax payment, validation of WHT assets and related tax matters. We note that taxpayers have encountered some challenges when using the platform since its introduction. In our opinion, this may have required the enhanced functionality of the TaxProMax platform.
Subject to the provisions of the Corporate Tax Law (“CITA“) or any regulation duly made under the ITA, each company is required to file an income tax return containing the prescribed information, within six (6) months following the end of its financial year or eighteen (18) months after incorporation This requirement extends to a foreign company that earns profits or is taxable in Nigeria. For a non-resident business that derives income but does not have a significant economic presence in Nigeria, the obligation is limited only to validating the applicable WHT.
We note that the FIRS is legally empowered to extend the time limit within which a business is required to file income tax returns, when the business makes a written request to the FIRS Council before the expiration of the stipulated time limit, requesting the extension. and showing a good and satisfactory cause of his inability to meet the schedule.
However, we believe that a significant number of taxpayers using the TaxProMax platform may have missed the deadlines to complete the process of filing returns and uploading WHT credit memos, due to technical issues initially encountered on the platform. form. The extension granted in the Notice is therefore necessary to protect taxpayers against penalties and interest for non-payment beyond their control. We are aware that most tax authorities, including the FIRS, have granted similar forbearance to taxpayers in many jurisdictions during the height of the COVID-19 pandemic. Given that many Nigerian entities have not yet fully recovered from the negative effects of the pandemic on their operations and results, the one-month extension granted in the public notice can be seen as part of the extraordinary FIRS reliefs to taxpayers linked to the pandemic.
It should be noted that the wording of the public notice suggests that taxpayers not using the platform, such as non-resident businesses, businesses operating in free zones, and businesses making payments in other currencies. than the naira, may not be able to take advantage of the extension granted.
In the meantime, taxpayers who have not yet filed their tax returns and uploaded their WHT credit scores to the TaxProMax platform, can take advantage of this extension to avoid the penalty for non-compliance.