Tuesday, November 5, 2024
HomeBusinessFCT-IRS Urge MDAs, Contractors On Remittance Of Withholding Tax

FCT-IRS Urge MDAs, Contractors On Remittance Of Withholding Tax

The Federal Capital Territory Internal Revenue Service (FCT-IRS) has asked contractors in the FCT as well as Ministries, Departments, and Agencies of Government (MDAs) to make sure that Withholding Tax (WHT) owed to the Service is remitted in a timely manner.

According to the circular issued on Sunday by the Service, withholding taxes intended for the Service were inadvertently sent to tax authorities other than the FCT-IRS, necessitating the need to inform the general public, particularly concerned organizations and contractors in the FCT.

A statement made available to newsmen on Sunday in Abuja by the Head, Corporate Communications, FCT-IRS,  Mustapha Sumaila.

The statement reads:”It is necessary for a taxpayer to understand the tax jurisdiction rule; WHT for limited liability companies is remitted to the Federal Inland Revenue Service (FIRS) while WHT for Enterprises and Individual contractors goes to the State IRS such as the FCT-IRS, if the transaction is done in the FCT.

“Regrettably, we have observed instances where the wrong tax jurisdiction is entered on the Government Integrated Financial Management Information System (GIFMIS) platform by the MDA desk officers. This error can lead to contractors suffering the loss of WHT credit and the relevant tax authority experiencing revenue loss. The beneficiary of the WHT may also be denied the WHT credit.

“To prevent such losses, we urge all MDA desk officers to ensure accurate data entry at the point of initiation. We also wish to draw the attention of enterprises and individual contractors in the FCT to this issue and caution them of the potential consequences.

“Henceforth, the FCT-IRS will not grant Tax Clearance Certificate on WHT credit that was wrongly sent to another tax jurisdiction by the Government Integrated Financial Management Information System (GIFMIS) platform.

“We advise all taxpayers to liaise closely with their respective MDA desk officers to ensure the correct tax jurisdiction is selected during WHT remittance.

“Our aim is to ensure a seamless tax administration system that supports compliance, promotes ease of doing business, and upholds the principles of transparency and accountability”, the statement further stated

It would be recalled that the FCT-IRS took over the administration, collection, and accounting of taxes in the FCT in 2018. Prior to this, FIRS was responsible for these functions. With the advent of GIFMIS, payment for contracts and the deduction and remittance of the WHT for both companies, enterprises, and individuals is done using the GIFMIS platform.

- Advertisment -

Most Popular

Recent Comments