Federal Inland Revenue Service (FIRS) on Wednesday 14 August 2019, issued a Public Notice directing taxpayers, particularly companies in the Fast Moving Consumer Goods sector, to deduct and remit withholding tax and value added tax on the “compensation” due to their distributors, dealers and agents. FIRS defines “compensation” to include commission, rebates, etc., granted in the form of cash, credit note or goods-in-trade.
FIRS claimed, in its Public Notice, that some companies have not been complying with the provisions of the Companies Income Tax Rates, etc. Deduction at Source (Withholding Tax) Regulations S.1 10 1997 (sic) and Paragraph 3.8 of its Information Circular No. 2006/02 of February 2006.
FIRS disclosed that it will commence monitoring of compliance with its directive by relevant companies.
Below is the full Public Notice from FIRS.