FIRS announces one-off waiver of late returns penalties and interest imposed on established tax liabilities.
The Federal Inland Revenue Service (FIRS) has issued a public notice announcing a one-month waiver of all outstanding penalties and interest computed by the TaxPro-Max on established additional liabilities arising from monitoring, desk review, tax audit and tax investigation exercises. In other words, taxpayers would now need to pay only the principal liabilities established during the various verification processes.
Consequently, the FIRS has advised affected taxpayers to settle all outstanding principal liabilities on or before 31 December 2022 to benefit from the waiver.
We applaud the FIRS' responsiveness to taxpayers' concerns following the use of TaxPro-Max to track tax audit and investigation, desk audit review and monitoring exercises. While TaxPro-Max has improved the ease of administration of Federal taxes, there are still some outstanding issues, which the FIRS will need to address to ensure that the online platform is efficient as expected.
It is important that the TaxPro-Max be a platform for the submission of income tax returns and payment of related income tax liabilities rather than a computational tool as is currently the case. Consequently, taxpayers should pay their income tax liabilities based on their computations. However, the TaxPro -Max should have the capability to analyze the information contained in the tax returns submitted and raise queries where there are inconsistencies with expected trends and the tax codes. Any resultant additional tax liability can then be assessed based on the results of the analytical review and the taxpayers' submissions on the issues raised.
This would eliminate the delay in the payment of income tax because of the need to reconcile the income tax liabilities per the returns submitted with the tax liabilities computed by TaxPro-Max. Consequently, there would be no need for the FIRS to frequently extend the filing date for income tax returns due to the differences in the tax liabilities computed by the taxpayers and TaxPro-Max.
In the meantime, taxpayers with outstanding undisputed tax liabilities should promptly settle their liabilities while taxpayers with open tax reviews, audits or/and investigations should proactively engage their respective tax offices for quick resolution of the dispute before the deadline to enjoy the waiver.
Please click here to read the Public Notice
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