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FIRS Updates VAT Filing Procedures on TaxPro-Max Platform

The Federal Inland Revenue Service (FIRS) has recently released important updates regarding the implementation of input Value-Added Tax (VAT) filing procedures through its administration solution, TaxPro-Max. This system offers a range of features, including seamless registration, tax filing, payment processing, automatic withholding tax credit, and other credits to the taxpayer’s accounts.

To clarify, input VAT refers to the value-added tax applied to the price paid for eligible goods or services. VAT-registered businesses have the authority to charge and add VAT to the value of the goods and services they provide.

In a statement issued on Friday, FIRS provided comprehensive guidelines on VAT filing processes using the TaxPro-Max platform. According to the statement, taxpayers are required to file their April 2023 returns in May 2023, following the normal filing schedule. During this period, all disabled columns will be enabled, and the automatic credit for purchases will be disabled.

To illustrate the filing process, transactions occurring from June 1 to June 30 are considered as “month one” for the purpose of VAT returns. The subsequent month, in this case, is July, specifically from July 1 to July 21 at midnight, where taxpayers are required to file returns for the transactions that took place during “month one.”

After the monthly VAT returns have been filed, the subsequent month (in the example, August 1 to August 31) is designated for addressing input VAT claims that cannot be verified, validated, or cross-checked online using TaxPro-Max. In such cases, manual tracing is conducted based on the data provided by the taxpayer during filing.

Furthermore, FIRS emphasizes that all suppliers who are successfully traced must comply with the regulations immediately. Failure to do so will result in the unremitted amount being recorded as a liability in their TaxPro-Max account, with penalties and interest accruing. The agency will initiate audit and enforcement actions according to the specified timelines.

If a purchaser claims input tax but the supplier cannot be traced, the claimed amount will be disallowed, and it will be considered a liability for the purchaser. However, if the claimant can assist the service in locating the supplier within the stated timeline (from the first day to the last day of the month following the VAT return filing), the liability can be waived.

Following the manual tracing of suppliers that TaxPro-Max cannot verify online, the subsequent month (in this example, September 1st to September 30th) will be dedicated to these efforts, as indicated by the service.

FIRS further states that all cases of unverified claims in the system will be closed. Traced suppliers will have a liability raised, and payments will be received accordingly. In contrast, for un-traced suppliers, the liability will be raised for the purchaser, and payments will be received. False claims may result in prosecution, and enforcement actions will be initiated against suppliers who fail to make payments within the specified timeline.

By providing these updates, FIRS aims to ensure a transparent and efficient VAT filing process through the TaxPro-Max platform, while reinforcing compliance and accountability among taxpayers and suppliers.

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