FIRS Offers One-Month Window for Taxpayers to Settle Foreign Currency Liabilities in Naira

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The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, yesterday said taxpayers with outstanding foreign currency tax liabilities have one-month window to settle their indebtedness in Naira.

The incentive regime, which takes effect from March, 1 to 31, 2022, covers all such liabilities which are due for payment on or before December 31 2021, and for all taxes except the Petroleum Profit Tax.

The move followed requests and submissions by taxpayers on the challenges they have encountered in sourcing for foreign currencies to offset their outstanding tax liabilities.

However, Nami, in a public notice, explained that the concession was a one-off opportunity as the law has stipulated that the currency a taxpayer transacts in is the currency with which the tax is to be paid.

He said, “In view of the number of requests, enquiries and the challenges encountered by the taxpaying public in sourcing for foreign currencies to offset outstanding tax liabilities, the Federal Inland Revenue Service (“the Service”) wishes to inform our esteemed taxpayers that a one-month window has now been opened for this category of taxpayers to settle their foreign currency tax liabilities in Naira with effect from the 1st of March, 2022 to 31st of March, 2022.”

The notice further clarified that “The applicable rate shall be the Investors and Exporters (I&E) Foreign Exchange Rate of the Central Bank of Nigeria (CBN) prevailing on the date of the transaction and or when the tax obligation falls due.”

“This concession is available to all taxpayers, covers all tax types, and all foreign currency tax liabilities falling due on or before 31st December 2021, except for companies in the Upstream (Oil & Gas) Sector, and the Petroleum Profits Tax,” the FIRS added.

A statement by the Special Assistant to the Executive Chairman, FIRS, Johannes Oluwatobi Wojuola, further pointed out that in order benefit from the concession, taxpayers within the stipulated category are expected to make all payments before March 31.

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