Filing of Withholding Tax (WHT) And Value Added Tax (VAT) Returns

Withholding tax is a tax deducted at source from the income due to the recipient of the income and paid to the government.

Value Added Tax is a consumption tax payable on the goods and service consumed by any person whether government agencies, business organizations or individuals. The firm/ business is required to pay VAT on goods and services purchases.

Every registered firm is to file their VAT and WHT returns monthly in their various tax stations. VAT and WHT returns are normally made monthly to the Inland Revenue Service on or before the 21st day of the next month following that in which the supply was made (VAT Act section 15).

Where a taxpayer fails to file returns or pay the tax due, the Relevant Tax Authority shall impose penalties and interest on the taxpayer, agent or employer from the due date of filing as provided in the applicable laws or regulations issues by the Relevant Tax Authority.

 

Procedure:

  • Monthly filing is to be done online on the FIRS Tax Pro Max platform.
  • Provide the schedule of vatable income for the period, upload and file before the due date.
  • Upon provision of the schedule, a payment reference code is generated on the FIRS tax promax platform and this code expires by 11:59pm of the same day.
  • The reference code generated on the FIRS platform is used to make VAT payment either online via remita or paid at the bank.
  • Please note that the payment of monthly VAT should only be made after the code has been sent to the client. If payment is made at the bank without referencing code, the amount paid will be disregarded by the service and the company would be made to pay again after doing the appropriate thing which is generating the code after uploading the VAT schedule.
  • The code is automatically linked to the uploaded schedule and reconciliation with the service is easier should there be an issue of understatement of remittances made by FIRS.
  • Firms file nil returns for VAT when they have no Vatable income within the stipulated period. For nil returns on, a bank statement has to be taken along with the completed form which will serve as third party evidence and is only requested by some tax stations.

For WHT:

  • A WHT schedule should be prepared in as shown below;

  • An evidence of payment should be attached to the WHT schedule.
  • A copy should be taken for acknowledgement which will be filed in the firm’s file.