An internal memo of the Federal Inland Revenue Service (FIRS) dated July 25, 2018 and captioned “Re: Circular on Withholding Tax Utilisation and K-Card Update Key Deliverables” (Memo) has become public knowledge. The Memo directed all Tax Controllers and State Monitors to issue to taxpayers, a letter in a template captioned “Overpayments/Withholding Tax Confirmation/Reconciliation for System Upload” (WHT Reconciliation Notice). Each WHT Reconciliation Notice is to be accompanied by a withholding tax (WHT) usage request sheet (Request Sheet). On receipt of the WHT Reconciliation Notice, the taxpayer is to complete the Request Sheet and go to its relevant FIRS office for a review, reconciliation and sign-off, by the taxpayer and the FIRS, of both the Request Sheet and a journal adjustment voucher (JAV). While the Memo required that that the sign-off of the Request Sheet and JAV be completed by August 30, 2018, the WHT Reconciliation Notice gives the taxpayer 15 days from the [date of] WHT Reconciliation Noticeto fill the Request Sheet and attend the FIRS office with relevant documentary proofs, for joint review and sign-off. The WHT Reconciliation Notice states that failure to comply with its directive will foreclose all options of the taxpayer for reconciliation and the taxpayer will have to accept the FIRS’ position. The Memo states that all utilization requests for WHT credits that have exceeded 3 years must be audited by the FIRS’ management. In this brief, we undertake a review of the underlying issues and legal implication of the Memo and WHT Reconciliation Notice on the rights of the taxpayer in Nigeria’s WHT/income tax system.


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