The recent back and forth on the collection of Value Added Tax, VAT in the country continues to allow deep concerns The recent back and forth on the collection of Value Added Tax, VAT in the country continues to allow deep concerns by key stakeholders in the nation’s economy to fester. These worries are further accelerated as the 21st of another month is just 24 hours away which signifies the reporting period for the payment of VAT. The worry becomes so pertinent as failure to file a return from 13 January 2020 incurs a fine of NGN50,000 in the first month of default and NGN25,000 in each subsequent month of default while failure to remit VAT attracts a penalty of 10% of the VAT payable plus interest at the prevailing CBN minimum rediscount rate (MRR).
Lending a voice to the myriad of uncertainty arising from the ongoing legal tussle between the federal government and some state governments, the Organised Private Sector of Nigeria through its chairman; Mr. Taiwo Adeniyi wants the matter quickly resolved.
Stressing that it is unfair for the group to suffer the downside of this heated debate which has made them vulnerable to default penalty as confidence in the tax administration continues to fade away, especially in collection and remittance of VAT to the relevant authority.
The group in a recent media briefing in Lagos implored the Federal Inland Revenue Service and the states to also engage with the private sector as they play a key role in the nation’s economy, and national development.
Also, the key economic players want to be involved actively in the dialogue. This is communicated in its recent statement below
’’We appeal that while the issue remains in the Legal Quarters, the Federal Inland Revenue Service (FIRS) and the States should not throw Organized Businesses under the bus’’.
See below the rest of the statement by the group:
’’We wish to affirm unequivocally, that Organised Businesses are not against the payment of taxes and levies in the country. However, the ongoing situation creates an environment of uncertainty, which will not only affect business competitiveness but also its sustainability.
“We are merely collecting Agents in this matter and should not suffer while offering this pro-bono service.
“It is important to also note that at a time when businesses are clamouring for streamlining and reduction of Tax burdens, the ongoing challenge has the potential to make Businesses pay double-VAT given the demands of the FIRS and State Governments for remittance of VAT. More so, as the deadline for remittance of VAT collection falls due on the 21st of every month.
‘’Businesses as the Collecting Agents, are practically unclear on authority to remit to and without a clear path, this would further aggravate the pain on businesses.
It is a popular saying that where two elephants fight, it’s the grass that suffers”. It is no longer news that Nigerian businesses have been battling with myriads of challenges, making the survival of enterprises and ease of doing business in the country among the worst in this part of the world, adding this current issue to accumulated issues facing Nigerian businesses would make the survival of Enterprises even tougher.