The Federal Inland Revenue Service (FIRS) has granted a full waiver on accumulated penalties and interests for outstanding tax liabilities subject to the payment of the full principal before December 31, 2023.
The tax agency said the concessions which align with Section 32 of the Federal Inland Service (Establishment) Act, LFN 2004 (as amended) were considered in recognition of the challenges faced by many taxpayers in settling their outstanding tax obligations, and in line with the commitment of the current government to support businesses.
This disclosure is contained in a notice personally signed by the Chairman of FIRS, Zacch Adedeji, where he explained that the full penalty and interest shall be reinstated after the expiration of the one-off concession window where the outstanding undisputed liability remains fully or partially unpaid.
Adedeji said the forgiveness of piled-up penalties and interests was “in recognition of the challenges that many taxpayers have faced in settling their outstanding tax liabilities.
What the FIRS Chairman is saying
He said that the concession also syncs with the commitment of President Bola Tinubu to support businesses to flourish.
The statement from Adedeji reads,
- “In recognition of the challenges that many taxpayers have faced in settling their outstanding tax liabilities, and in line with the commitment of the current government to support businesses, the Federal Inland Revenue Service has approved the following tax concessions for taxpayers with outstanding tax liabilities, in accordance with Federal Inland Revenue Service (Establishment) Act, LFN 2004 as amended: Full waiver of penalties on outstanding tax liabilities and Full waiver on interests on outstanding tax liabilities.
- “Taxpayers are advised that the waiver of interest is subject to the full settlement of outstanding principal on or before 31 December 2023.
- “Please note that the full penalty and interest shall be reinstated after the expiration of this one-off concession window where the outstanding undisputed liability remains fully or partially unpaid.
- “The FIRS appreciates all taxpayers who have been diligent in complying with their tax obligations as and when due while serving their continued support and cooperation for a more responsive and robust tax system.’’
What you should know
- The FIRS imposes penalties and interests for failure by companies to fulfil their tax obligation as and when due as stipulated in extant tax laws.
- Section 27(2) of the FIRS Act suggests that liability to pay a penalty is triggered by default to comply with a demand by the FIRS for payment of an outstanding tax and not by default to pay the tax in the first instance.
- Section 40 of the same Act also states that in the case of withholding tax, interest, and penalty accrue from the date of default.