On the 14th of August 2019, The Federal Inland Revenue Service (FIRS) issued a public notice reminding all companies to ensure they remit their Value Added Tax (VAT) and Withholding Tax (WHT) by the 21st day of every month.
The notice which was signed by the FIRS Chairman noted that companies particularly in the Fast Moving Consumer Goods (FMCG) sector have been found not to have deducted VAT/WHT from the compensation/commission/rebate paid to their distributor and are being reminded to ensure compliance.
The notice is in line with the Companies Income Tax Act (rates etc, deduction at source (withholding tax) regulations S.1 10 1997 and Paragraph 3.8 of the Federal Inland Revenue Service Information Circular No. 2006/02 of February 2006.
FMCG also known as consumer packed goods (CPGs) are low value products with regular high turnover of product. They often have very low profit margin, but because to their bulk purchases, they are usually very profitable. FMCG’s carry shorter shelf life and are bought for every day consumption. Examples of such goods include, Processed Foods such as Cereal, Noodles, Beverages, Cosmetics, and Toiletries etc.
We recommend that all companies particularly those in the FMCG, ensure that they charge/deduct and remit VAT and WHT to FIRS, to avoid being penalized.
The above information is for educational purposes only and does not constitute professional advice by Blackwood & Stone LP.
For more information please contact:
Blackwood & Stone LP
+234 903 3501 613