FIRS, NERC set June 30 deadline for VAT remmitance

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The Federal Inland Revenue Service (FIRS) and the National Electricity Regulatory Commission (NERC) are collaborating on prompt remittance of taxes by power sector operators in the wake of the take-off of the Nigerian Electricity Supply Industry (NESI).

At a joint workshop for stakeholders in the power sector last week, both institutions agreed that while discussions are ongoing between stakeholders, outstanding Value Added Taxes, VAT deducted be remitted to the FIRS on or before 30th June, 2014.

Part of the ongoing discussions, according to a statement signed by Wahab Gbadamosi, Head, Communications and Liaison Department, FIRS, are that capital items would be defined according to the standards of the International Financial Reporting Standards (IFRS).

Also gas purchases would need to be treated under some form of special dispensation such as input VAT suffered by GENCos (Generating Companies) would be considered under this dispensation.

Earlier, Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala had told participants at the workshop that Value Added Tax (VAT), provided an instant opportunity to measure progress for the ongoing transformation in the power sector.

Okonjo-Iweala, represented by the Permanent Secretary in the Ministry, Anastasia Daniel-Nwaobia, noted that the workshop will “ensure there is a synergy between the two sectors in a manner that enables FIRS plug into existing platforms in the industry with a view to build or deploying effecting technology base system that will enhance tax compliance and overall transactional efficiency in the sector”.

Also, the Acting Executive Chairman of FIRS, Kabir Mashi, remarked that the collaborative efforts was part of the Service’ resolve to focus more on the need to grow non-oil revenue in order to meet the developmental needs of the country.

Noting that the FIRS had earlier embarked on a similar initiatives in the Aviation Industry, Banking Sector, Government`s Ministries, Departments and Agencies (MDAs), States through the Joint Tax Board (JTB) and the Local Government.
Mashi said there were ongoing arrangements with the Office of the Accountant General of the Federation (OAGF) through the GIFMIS platform and E-Tax Pay to source-deduct VAT from MDAs and remit to the appropriate account.

The Ag. FIRS Chairman spoke about FIRS’ latest IT collection platforms (the VAT Collect, the E-Tax Pay, and the Tax Calculator etc) and draw on specifics in the VAT Code with respect to the power and energy sector.

“On the other hand, we want to get a good grasp of your process flows, your billing system, the handling of your payments among others.”

Prof. Chidi Onyia, the Chief of Staff, to the Minister of Power, Professor Chinedu Nebo, who represented the Minister as well as the Chairman of NERC, Patrick Umeh, assured that the ministry was committed to ensuring transparency in the entire process.

They also pledge to support the FIRS in ensuring payment of appropriate taxes in order to impart on the nation’s Internally Generated Revenue (IGR) to lessen governments over dependence on oil revenue.

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