As you may be aware, the Federal Inland Revenue Service (FIRS) and several States’ Internal Revenue Services rolled out several palliative measures to cushion the effect of the COVID-19 pandemic on taxpayers.

Some of the palliatives measures that were offered by the FIRS to taxpayers was the waiver on interest and penalty on outstanding tax debts arising from tax desk review, audit and/or investigation exercise. The FIRS exercised its powers to waive the interest and penalty on outstanding tax audit liabilities. This is one of the numerous initiatives by the FIRS to aid in cushioning the negative impact of COVID-19 on taxpayers. The FIRS has stated that this waiver does not explicitly apply to interest and penalty on tax liabilities that have not been established through a tax desk review, audit and/or an investigation exercise.

First Thoughts: Like the Phoenix; Like Nigeria.

I grew up reading a lot of fantasy story books and believed for a very long time in the existence of a lot of mythical creatures. I looked forward to encounters with fairies, centaurs, bush babies, unicorns, dinosaurs and mermaids among others. I was almost a teenager before I got to finally accept that I was never going to actually see any of these creatures and so had to settle for the encounters with them in these story books and movies. I read all the 7 Harry Potter Books by J.K. Rowling from my early teens and into my early twenties and of course watched every single one of the movie adaptations and this simply reinforced my fascination with the imaginary world.

According to the latest Federation Account Allocation Committee (FAAC) Disbursement Report, released by the National Bureau Statistics (NBS), the sum of N676.41bn was disbursed to the three tiers of government in August 2020 from the revenue generated in July 2020. Compared to the amount disbursed in the previous month (July 2020) this brings about a 2.83% decrease. 

The latest CPI and Inflation Report released by the National Bureau of Statistics has revealed that inflation increased by 13.22% (Year-on-Year) in August 2020. This is 0.40% points higher than the rate recorded in July 2020 (12.82%).

It’s is not so surprising that the consumer price index (CPI) in Nigeria rose to its highest in over 3 years in the previous month (August 2020). The increase in the price of food is said to be the major reason in this hike.

As you are aware, on Tuesday, 10^th September 2020, the Tax Appeal Tribunal sitting in Lagos State, Nigeria (TAT) delivered Judgement in  Appeal No. TAT/LZ/VAT/029/2019: Ess-Ay Holdings Limited v. Federal Inland Revenue Service (FIRS) (available at: https://taxaide.com.ng/wp-content/uploads/2020/09/Judgement-Ess-ay-Holdings-Ltd-v.-FIRS.pdf)

Issues to be determined:

1. Whether rental income from real property is subject to Value Added Tax (VAT) under Nigeria’s VAT Act, 1993 (as last amended in 2007)?;
2. Whether the provisions of the FIRS Information Circular No. 9701 dated 1^st January 1997 which exempted only rents from residential properties (and not commercial properties) is valid?

First Thoughts: Post-Lockdown Musings

I have often heard some people say they usually get their inspiration to write from rather uncomfortable situations and experiences. I say, ‘well done to them’. I guess I need to learn how they manage to do this. So, I’ve been in traffic for the last three hours and guys, I can’t seem to get any inspiration from this experience and putting down my ‘First Thoughts’ for today’s Newsletter has been quite a challenge. I have been looking from my laptop to the window repeatedly as we move at snail speed. Once or twice, I have been tempted to step out of the car to stretch my legs but hey, this is Lagos, and this is the Third Mainland Bridge! Anything can happen! Hopefully, I would get home before I am done with this piece.