KPMG professional services has commended the Federal Inland Revenue Services (FIRS) for giving affected Financial Institutions (FIs) additional four months to complete the due diligence procedures required to identify Reportable Accounts and collect reportable information from the affected customers.
On Tuesday, 19 May 2020, the FIRS issued a Public Notice announcing extension of the deadline for Financial Institutions to file their annual returns for Automatic Exchange of Information-Common Reporting Standard (AEOI-CRS) from May 31, 2020 to September 30, 2020.
The announcement follows the FIRS’ earlier palliative measures to alleviate the impact of the COVID-19 pandemic on taxpayers.
The tax and advisory services firm in a review note to clients stated:”We commend the FIRS for extending the deadline for filing the AEOI-CRS returns. This gives the affected Financial Institutions (FIs) additional four months to complete the due diligence procedures required to identify Reportable Accounts and collect reportable information from the affected customers.
“These include name, address, jurisdiction of residence, tax identification number in the jurisdiction of residence, date and place of birth.”
The extension according to KPMG, will also allow FIs more time to acquire the appropriate technology for validation of data collected from customers, and to carry out data conversion to XML format, encryption and submission of AEOI-CRS returns to FIRS.
It further noted that as this is the first AEOI-CRS returns to be filed in Nigeria, the extension should enable the FIRS to review possible technological glitches during setup, data collection, management and exchange, among others, that are commonly associated with adoption of new technology.
“The affected FIs should make good use of the extended time to collect complete and accurate reportable information from their customers before submission to the FIRS. This is to avoid penalties under the Income Tax (CRS) regulations, which are as high as N10million in the first month of failure to comply, and N1million for every month in which the default continues,” the firm explained.
Similarly, the FIRS announced the establishment of a Large Tax Office (LTO) (Non-Oil) in Apapa, Lagos to promote voluntary compliance and ease of paying taxes.
The Apapa LTO which, effective from May 15, 2020, will cater for all domestic aviation companies, construction companies, domestic shipping companies, logistics, haulage and transportation companies in Lagos and concessionaires at the Lagos ports whose revenues exceed N2 billion, expects affected taxpayers to file all their tax returns and correspondence at the LTO.
“We commend the FIRS for its various efforts to improve the ease of tax compliance particularly by establishing tax offices closer to businesses.
“However, while Apapa LTO will provide a relief for businesses based in Apapa, the reverse will be the case for domestic aviation companies based mainly in Ikeja, Lagos that would be better served by the Ikeja LTO,” KPMG noted.
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