FIRS to Collect Tax Digitally from 2022

The Federal Inland Revenue Service (FIRS) has disclosed that it will digitalize and automate its tax administration processes effective 2022. The FIRS has stated that the aim of this project is to block revenue leakages, which will transform revenue generation system in Nigeria.

Speaking at the Pedabo 2022 Annual Public Private Sector Engagement, Executive Chairman of the FIRS, Muhammad Nami, explained by virtue of the amendment to Section 25 of the FIRS (Establishment) Act in the 2021 Finance Act, individuals who fails to grant the Service access to its information technology systems to connect to its automated tax administration solution is liable to penalties under the law.

“We will seek to achieve 100% automation of all our tax administration processes, which will block revenue leakages and revolutionize revenue generation in the country. We expect your full cooperation in this regard, considering that by the amendment to Section 25 of the Federal Inland Revenue Service (Establishment) Act in the 2021 Finance Act (through Section 18 of the 2021 Finance Act), any person who fails to grant the Service access to its information technology systems to connect to its automated tax administration solution is liable to penalties under the law.”

He stated that in 2022, the FIRS will prioritize the collection of tax from the digital economy, and it will deploy technological tools in assessing entities that fall within the Significant Economic Presence (SEP) threshold and relevant turnover generated from Nigeria.

“With the amendment of Section 10 of the VAT Act by the Finance Act 2021, we will implement the published Guidelines on the Simplified Compliance Regime on VAT for Non-Resident Suppliers, to collect VAT on digital supply of services and intangibles to Nigeria.

 “The Service has deployed a digital service interface, the Digital Economic Compliance (DEC) Tool, to facilitate the implementation of the Regime. The implementation of the DEC Tools will also assist the Service in determining entities that fall within the SEP threshold and relevant turnover generated from Nigeria. This tool will go live shortly.”