Nigeria: Guidelines on nature and scope of tax compliance inquiry processes
Guidelines to provide clarity regarding nature and extent of inquiries related to desk examinations, tax audits, and tax investigation exercises
Guidelines on nature and scope of tax compliance inquiry processes
The Federal Inland Revenue Service (FIRS) released guidelines to provide clarity regarding the nature and extent of inquiries related to desk examinations, tax audits, tax investigation exercises, and other tax inquiry processes.
The main objectives of the guidelines are to clarify the nature and scope of the various tax compliance activities and eliminate potential conflicts and disputes between revenue officers. The key takeaways from the guidelines include:
- Desk review and monitoring exercises
- Tax audits
- Tax investigations
- Special tax crimes investigations
- Transfer pricing audit
- Turnover threshold determination
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These guidelines likely will help to optimize resources expended by taxpayers during tax inquiries and facilitate more efficient tax compliance exercises in the country. The guidelines would also help to eliminate unnecessary disputes between officers of the tax authorities.
Tax professionals note that FIRS is focused on making tax administration processes increasingly real-time or close to real time with the introduction of technology. Increased digitalization and implementation of analytical tools will significantly increase the efficiency and effectiveness of tax administration.
It is also essential for the FIRS to reconsider its comments on Turnover Threshold Determination in light of a recent judgment by the Tax Appeal Tribunal, as it appears to contradict the decision of the Tax Appeal Tribunal (TAT) in the case between Little Company Nigeria Limited (LCN) vs. FIRS when the TAT established that the transfer of LCN鈥檚 file between tax offices, based on FIRS guidelines and regulations without due consideration to the company鈥檚 registered address was in violation of the law. Read TaxNewsFlash
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