On 10 March 2020, the Federal Inland Revenue Service (“FIRS” or “the Service”) issued a public notice titled “Automated Value Added Tax (VAT) Filing and Collection System” (“the Notice”), to inform the public of the newly Automated VAT Collection System (VATrac), for Companies in wholesale/retail businesses such as branded shops, super stores, general supermarkets, standard restaurants and eateries in Nigeria.

The Notice which was signed by the Executive Chairman of the FIRS, Mr. Muhammed Nami, stated that the introduction of the automated VAT platform will result in efficient collection and remittance of VAT on all taxable transactions for wholesale / retail businesses. He further stated that the VATrac will enable direct audit/reconciliation of all VAT transactions to ensure optimum compliance of such companies with the relevant tax laws.

Based on the Notice, effective 1 April 2020, the VATrac will become the approved channel for all VAT returns filing and payment for wholesale and retail businesses. To this end, such companies are required to liaise with the nearest FIRS tax office to gain access to the FIRS eVAT platform, so as to ensure timely compliance.

In addition to the above, the FIRS stated in the Notice that such wholesale and retail businesses must ensure that the following information are reflected on transaction/sales receipts issued to their customers going forward:

  1. FIRS Tax Identification Number (TIN) or Joint Tax Board TIN
  2. Invoice print date
  3. Goods/product description
  4. Receipt number
  5. Grand total billed to the customer and
  6. Standard VAT rate of 7.5% applicable on the grand total, shown as a line item

In conclusion, the FIRS noted that the VATrac was not intended to disrupt or negatively impact the day-to-day business and existing systems of taxpayers, as the VATrac is built to interoperate with any Point of Sales/Fiscal machine.

This is a convenient way to stay tax compliant and avoid penalties.

Should you require any clarification and assistance, do not hesitate to contact smehelpdesk@fcmb.com, SMEAdvisoryUnit@fcmb.com or your designated TAX Consultant.