‘It’s an irrelevant burden’ – Expert faults FIRS new VAT filing process

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By Ishola Oludare

A fellow of the Chartered Institute of Taxation of Nigeria, Dr Gbenga Adeoye, has faulted the new process introduced by the Federal Inland Revenue Service (FIRS) for filing Value Added Tax (VAT) returns.

DAILY POST reports that the FIRS recently announced new updates to the VAT filing procedures on the TaxPro Max system, to increase the efficiency of the input VAT claim, sales adjustment entries and output VAT filing procedures.

The FIRS is seeking to seamlessly match Output VAT collection to the Input VAT claimed by businesses and promote transparency in VAT compliance.

But it appears business owners are finding the new VAT filing process extremely difficult, even as the FIRS released videos and held webinars to educate people on how to log in and file their monthly returns.

In a chat with our correspondent, Adeoye condemned the sudden introduction of the new VAT filing procedure, describing it as irrelevant and counterproductive.

According to him, tax is not what people love to pay, especially when they cannot see corresponding benefits, hence, making it difficult is like pushing them not to pay.

Adeoye cautioned the tax agency not to compound taxpayers’ problems by making payment difficult, saying people are naturally looking for ways to avoid tax.

He said the March monthly VAT filing which was meant to be filed on or before April 21, “suddenly requires that you upload an excel sheet,” showing the names of customers/clients, their Tax Identification Numbers, amount of Sales, Code representing Nature of Transaction, type of services or product and description of product or service.

Adeoye said: “As a matter of fact a video was posted on Tax Pro Max asking that each sheet can take 1000 line items. How do you begin to fill an Excel sheet containing all the above fields with 1000? You will not actually be able to file if you sell items in pieces such as soft drinks.

“FIRS claimed that once you indicate the TIN of a taxpayer, the respective VAT against such taxpayer will go to the system as input VAT as a second leg. Hence, there is no room for you to post local purchases that will enable you to claim or enjoy input VAT. The question is, does FIRS think all taxpayers will file at the same time? If the person you bought from is yet to file, it means you will have no input VAT. That means you will have to pay double VAT.”

The international lawyer regretted that most business owners could not sleep from April 19 to 21, because many of them were unable to file their VAT returns, saying some eventually gave up.

He mentioned that the Excel sheet method of filing VAT “is not going to work,” stressing that over-the-counter transactions do not allow asking for Tax Identification Numbers of customers.

As a solution, the Chartered Accountant charged the FIRS to allow normal VAT filing to continue as it used to be, requesting the use of VAT monitoring and audit exercise to cross-check records of filings and “stop stressing taxpayers with unreasonable additional burdens.”

He concluded that the FIRS and all other agencies should engage stakeholders before introducing any new policy.

“Please note that many companies have not recovered from the damage done by the CBN Naira redesign policy on the economy and so, introducing this new filing method will amount to adding salt to injuries.

“Such pain is not good at the time of tax payments as it negates the canon of Taxation and is contrary to ease of doing business, because productive time is wasted on the irrelevant exercise.

“All circulars about seminars on the new policy should be converted to apologies to taxpayers,” he stated.

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