Ensure to remit WHT due to service, FCT-IRS advises MDAs, Contractors

Ministries, Departments and Agencies of government (MDAs) as well as contractors in the FCT have been strongly advised to ensure that Withholding Tax (WHT) due to the Service is remitted accordingly.
The Federal Capital Territory Internal Revenue Service (FCT-IRS) stated this through the circular it released on Sunday.
A statement issued in Abuja on Sunday by the Head, Corporate Communications of the service,Mustapha Sumaila indicated that Withholding Taxes meant for the Service were wrongly paid to tax authority other than FCT-IRS hence the need to educate the general public especially concerned organisations and contractors in the FCT.

The statement explained that it is necessary and expedient 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”.

It will 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.