FIRS grants full waiver on penalties and interests for outstanding tax liabilities

In a recent development, the Federal Inland Revenue Service (FIRS) has announced the approval of a complete waiver on penalties and interests for all outstanding tax liabilities. This concession is contingent on the payment of the full principal amount before December 31, 2023, and aims to alleviate the challenges faced by taxpayers in settling their overdue tax obligations.

The waiver details were outlined in a public notice signed by Zack Adedeji, the Executive Chairman of FIRS. The concessions align with Section 32 of the Federal Inland Service (Establishment) Act, LFN 2004 (as amended). The FIRS expressed its recognition of the difficulties encountered by many taxpayers and emphasized that this move is in line with the government’s commitment to supporting businesses.

Adedeji clarified that the full penalty and interest would be reinstated after the conclusion of this one-off concession window if the outstanding undisputed liability remains fully or partially unpaid. The FIRS Act’s Section 27(2) indicates that a penalty is triggered by default in complying with a demand for payment, not the default in paying the tax initially.

Furthermore, Section 40 of the FIRS Act specifies that interest and penalty accrue from the date of default, particularly in the case of withholding tax. Taxpayers are advised that the waiver of interest is contingent upon the complete settlement of the outstanding principal on or before December 31, 2023.

The FIRS expressed appreciation for diligent taxpayers who have consistently met their tax obligations on time and called for continued support and cooperation to enhance a more responsive and robust tax system.