Ukwuoma Ugwuadu & Co. - Chartered Accountants -

02/11/2025

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Taxpayer concerns and complaints

Office of the Tax Ombud to hear and settle taxpayer complaints timeously, before they become judicial.

The Joint Revenue Board of Nigeria (Establishment) Act (JRBNA) established the office of tax ombudsman to act as a mouthpiece for aggrieved taxpayers.

The office is empowered to provide information and raise awareness of taxpayer rights and obligations, and the functions of the tax authorities.

The ombudsman can also institute legal proceedings on behalf of the less privileged taxpayers.

Section 41 (1) of the JRBNA said, inter alia, “The Office of the Tax Ombud shall have the powers necessary or expedient for the performance of its functions under this Act, including power to —

(a) serve as an independent and impartial arbiter to review and resolve complaints relating to tax, levy, regulatory fee and charges, customs duty or excise matters;

(b) review complaints against tax officials and authorities and resolve them through mediation or conciliation by adopting informal, fair and cost-effective procedures;

(c) receive and investigate complaints lodged by taxpayers regarding the actions or decisions of the tax authorities, agencies or their officials;”

The Tax Appeal Tribunal (TAT)

Where a tax dispute cannot be settled by the tax ombudsman, either party – the relevant tax authority or the taxpayer - may approach the tax appeal tribunal for adjudication.

Government, under Section 23 of JRBNA, “established a joint tax appeal tribunal to exercise the jurisdiction and powers to settle any tax dispute and controversy arising from the administration of this
Act or any other tax laws made by the National Assembly.”

END

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28/10/2025

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The Tax Clearance Certificate (TCC)

At the end of the day, you are entitled to a tax clearance certificate to certify that you are tax compliant.

Every taxable person has a right to a tax clearance certificate after fully paying tax.

But you have to apply for it.

The NTAA, in Section72 says “(1) Whenever the relevant tax authority is of the opinion that tax assessed on profits or income of a person has been fully paid or that no tax is due on such profits or income, it shall issue a tax clearance certificate to the person within two weeks of the demand for such certificate by that person or, if not, give reasons for the denial.”

The Importance of TCC

NTAA Section 72 (2) says: “Any Ministry, department or agency of Government or any commercial bank with whom any person has any dealing with respect to any of the transactions mentioned in subsection (4), shall demand from such person, a tax clearance certificate of three years immediately preceding the current year of assessment.”

According to the NTAA 72 “(4) The TCC is required for transactions in relation to: -
(a) application for certificate of occupancy;
(b) approval of building plans;
(c) application for award of contract by the government or its agencies;
(d) application for fi****ms licence;
(e) application for import and export licence; and
(f) application for trade licence

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26/10/2025

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Lastly, don’t attempt to induce, influence or entice an authorised tax officer.

You should methodically keep your records and declare fully all your incomes and expenses.

Let the tax officer do his job accordingly.

On the other hand, authorised tax officers must be above board.

They should not demand or accept any gratification from a taxable person.

NTAA Sections 114 and 115 impose severe penalties, including prison terms, for tax officers and taxpayers who engage in acts of misconduct.

NTAA Section 114 says, “A person, whether or not appointed for the administration of this Act, any other tax law or employed in connection with the assessment and collection of a tax, who —

(a) demands or accepts any gratification from a taxable person in the performance of his functions under this Act or any other tax law;

(b) withholds for his own use or otherwise any portion of the amount of tax collected;………
commits an offence and is liable on conviction to a fine equivalent to 200% of the sum in question or imprisonment for a term not exceeding three years or to both.”

And in Section 115, it says, “A person who attempts to induce, influence or entice an authorised officer, in order to obtain any tax benefit in the course of duty commits an offence and is liable on conviction to —

(a) in the case of an individual, a penalty of ₦500,000; and

(b) in the case of a body corporate, a penalty of ₦2,000,000 or imprisonment for a term not exceeding three years or both, in addition to paying the tax due.”

Next: The Tax Clearance Certificate

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25/10/2025

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No place to hide in the new tax regime.

The banks will report inflows into your bank account to the relevant tax authority.

Other financial institutions – stock brokers, insurance companies, cryptocurrency agencies- will report inflows into your bank account to the relevant tax authorities.

Every bank account in Nigeria is associated with a TIN and or a bank verification number (BVN). This information links any bank account transactions to a legitimate bank account holder.

Under the ‘Information to be delivered by bankers and others’, the NTAA 29 mandates as follows: -
“(1) ……., every bank, insurance company, stock-broking firm, or any other financial institution” (including a VASP), “shall prepare, with or without demand by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of —
(a) new customers; and
(b) existing customers in the case of —
(i) an individual, all transactions where the cumulative transactions in a month amount to ₦25m or more, or
(ii) a body corporate, all transactions where the cumulative transactions in a month amount to ₦100m or more.”

This reporting requirement will help the tax authorities to monitor high-value transactions in order to ensure full tax compliance and increase tax revenue.

Next: No Corrupt practices. Be warned.

24/10/2025

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Value Added Tax Fiscalisation System - there is no place to hide.

Failure to grant access for the deployment of technology (EFS) by NRS, and or failure to use the EFS.

Section 23 of NTAA mandates the Nigeria Revenue Service (NRS) to deploy an Electronic Fiscal System (EFS) that shall be used by all taxable persons making taxable supplies for recording and reporting all sales.

The best approach is to accede. Allow NRS to deploy its software.

Failure to do so could be costly.

Section 103 of NTAA stipulates: -
“A person who refuses to grant access to the relevant tax authority to deploy technology after 30 days of receipt of the notice under this Act is liable to an administrative penalty of ₦1,000,000 for the first day of default and ₦10,000 for each subsequent day of default.”

Imagine paying ₦1,000,000 for the first day of refusing to grant government access to install the EFS in your systems and paying ₦10,000 for each subsequent day of default, from 30 days after you were notified.

And when you have allowed access for the EFS deployment, Section 104 of NTAA enjoins you to use the EFS to process taxable supplies invoicing.

Otherwise: “A taxable person that fails to process a taxable supply through the fiscalisation system is liable to an administrative penalty of ₦200,000 plus 100% of the tax due and an interest at the prevailing Central Bank of Nigeria Monetary Policy rate per annum.”

Next: The banks, and other financial institutions will report your inflows.

23/10/2025

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In the new tax regime, there is no place to hide.

Value Added Tax Fiscalisation System

A VAT Fiscalisation system has been introduced. Section 23 of NTAA mandates the Nigeria Revenue Service (NRS) to deploy an Electronic Fiscal System (EFS) that shall be used by all taxable persons making taxable supplies for recording and reporting all sales.

Can you imagine that?

The government wants to know every sales transaction you make.
The EFS includes issuing electronic sales invoices for Business-to-Business (B2B), Business-to-Government (B2G), and Business-to-Consumer (B2C) transactions. Taxable persons shall be responsible for maintaining accurate records of all transactions passing through the EFS.

Section 153(4) of NTA says that, for the purpose of issuing VAT invoices to customers, “the Service may direct any taxable person who makes taxable supplies to adopt the use of an electronic invoice, provided that it gives a notice of at least 30 days to the person.”

The government will certainly just open the tax portal, get your TIN and your particulars, and write to you to adopt the EFS.
And you are expected to accede within 30 days of receiving the letter.

Further, in NTA Section 158, we read:
“(1) A taxable person making a taxable supply shall implement the fiscalisation system deployed by the NRS in accordance with the Nigeria Tax Administration Act, 2025.”

“(2) The fiscalisation system may include fiscal equipment consisting of electronic devices, software solutions or a communication system involving a secured network, or any such combination of the components for electronic invoicing and data transfer as the Service may prescribe or deploy.”

So, one must use the government e-invoicing platform to issue sales invoices to customers.

Next: It’s a crime if you refuse, and the penalty is heavy.

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22/10/2025

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Input VAT paid on the purchase of services and fixed assets is now recoverable.

NTA Section 156(5) gave the cushion this way:
“(5) Input tax incurred by a registered person on any taxable supply, including services and fixed assets made to such person, may be deducted from the tax payable by the person on its taxable supplies at the end of the tax period in which the supply occurred, but only to the extent that the input tax was incurred for the purpose of consumption, use or supply in the course of making taxable supplies.
Provided that:
(a) where any input tax is incurred in making both taxable and non-taxable supplies, only the proportion relating to making taxable supplies may be deducted;
(b) The input tax shall be allowable for deduction within five years after the end of the tax period in which the input tax was incurred.

(6) The input tax which may be deducted in line with subsection (5) shall be limited to taxable supplies made as from the commencement of this Act.”

It is commendable that NTA 156(5)(b) allows input VAT paid on supplies of services and fixed assets to be deductible within 5 years after it was incurred. Companies that invest heavily in fixed assets, for which they pay high fees for haulage, technical and installation services, will rejoice at this. It helps the cash flow.

Next: No place to hide from tax.

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21/10/2025

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Refund of Value Added Tax (VAT)

The new tax regime allows for the excess input VAT to be refunded to the taxpayer. You have to request from the Nigerian Revenue Service in writing for the excess VAT refund.

NTA Section 156 (2) says “A taxable person shall be entitled to a refund of excess VAT not utilised as a credit, upon request to the Service and provision of such information or documents as the Service may require.”

To paraphrase Section 156 (4) of NTA: A person whose taxable supplies (sales) are chargeable to VAT at 0%, who pays VAT (input) on taxable supplies (the purchases) consumed in the production of its zero-rated taxable supplies (sales), may thereafter request a refund of the input VAT paid.

How to apply for an excess VAT refund

Where your taxable supplies consist of the goods and services VAT-rated at 0%, you will be entitled to an excess input VAT refund.

Section 56 of NTAA outlines the process of VAT refund as follows: -
“(1) A taxable person that qualifies for VAT refund shall make a request to the Service in the prescribed form.

(2) The request referred to in subsection (1) shall be made not later than 12 months after the transaction giving rise to the refund; otherwise, it shall lapse.

(3) Where a valid request is received from a taxable person, the Service shall, not later than 30 days after the receipt of that request, refund the overpaid or excess tax to the taxable person, or the amount shall be eligible for set-off against any tax liability of the taxpayer.”

Next: VAT on services and fixed assets is now recoverable.

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20/10/2025

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Some Taxable Supplies that are charged at 0% VAT rate

NTA Section 187 lists many goods and services considered essential that are now charged to VAT at 0%.

These goods and services include:
(a) basic food items;
(b) all medical and pharmaceutical products, including medicinal herbal products;
(c) educational books and materials;
(d) fertilisers;
(e) locally produced agricultural chemicals;
(f) locally produced veterinary medicine;
(g) locally produced animal feeds;
(h) live cattle, goats, sheep and poultry;
(i) agricultural seeds and seedlings;
(j) electricity generated by generation companies (GENCOs) and supplied to National Grid or Nigeria Bulk Electricity Trading Company (NBET);
(k) electricity transmitted by Transmission Company of Nigeria (TCN) to Electricity Distribution Companies (DISCOs);
(l) medical services,
(m) tuition relating to nursery, primary, secondary or tertiary education
(n) exported goods excluding oil and gas;
(o) exported services;
(p) exported incorporeal property;
(q) medical equipment;
(r) electric vehicles; and
(s) parts, semi-knock-down units for the assembly of Electric Vehicles.

Next: Value Added Tax Refund

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18/10/2025

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The Value Added Tax (VAT)

The buyer will pay the VAT on an invoice on which VAT is not included

Where you buy taxable goods and services with an invoice on which VAT is not included, the law says that you must self-account for the VAT payable – you will pay the VAT - and remit it to NRS before or on the 14th day of the month immediately following the month of the transaction.

Section 155 (2) of NTA says: “The Service may direct a taxable person to whom taxable supplies are made in Nigeria and issued an invoice on which VAT is not included, to self-account for the VAT payable and remit it to the Service.” Subsection (4): “The VAT collected, withheld or self-accounted under this section shall be remitted to the Service on or before the 14th day of the month immediately following the month of the transaction or as may be prescribed by the Service.”

Next: Taxable supplies VAT-rated 0%

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17/10/2025

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Non-payment of VAT disqualifies the deductibility of expenses and capital expenditure (on which VAT is due but was not paid), in profits ascertainment.

Any expenses, or purchase of fixed assets, on which VAT is due but was not paid, will be disallowed in ascertaining chargeable profit.

Therefore, if you want all your business allowable expenses to be accepted, pay VAT accordingly.

NTA Section 21(p) says that “any expense on which Value Added Tax is due under this Act but was not charged, or in the case of imported items, any expense on which the applicable import duty or levy was not paid, shall not be allowed for the purposes of ascertaining the profits or income from any trade, business, profession or vocation.

Also, in NTA 27 (2), “the capital allowance to be deducted………, shall be the amount relating to the qualifying capital expenditure incurred in generating the assessable profits: - Provided that where value added tax is due, ….…., but not charged on an asset, or in the case of an imported item, where the applicable import duty or levy was not paid, the relevant expenditure shall not be eligible as a qualifying capital expenditure.”

So, the fixed assets qualifying expenditure, on which VAT is due but was not paid, will not be allowed for capital allowance purposes.
VAT to be withheld by your customers or clients

The VAT you charge could be withheld from you by your customers/clients and paid directly to NRS.

NTA Section 155 said, that the following persons shall collect or withhold VAT on taxable supplies made to them and remit it to the Service before or on the 14th day of the month immediately following the month of the transaction or as may be prescribed by the Service: - (a) Federal, State, Local Government and their respective Ministries, Departments or Agencies; or (b) any other person appointed by the Service to collect or withhold VAT.

Therefore, when you make taxable supplies and charge VAT to governments or their respective ministries, they will pay only for the ex-VAT value (not the gross, which includes the VAT charged) and withhold the VAT component. They are expected to remit the VAT to NRS on or before the 14th day of the following month.

Next: Self-accounting for VAT not paid.

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16/10/2025

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The Value Added Tax (VAT)

In the new tax regime, the Value Added Tax (VAT) rate remains at 7.5% on taxable supplies.

The filing of VAT monthly returns also stays at ‘before or on the 21st day of the following month’.

VAT invoice (sales invoice) must be issued and must include the following information

A supplier of taxable goods or services shall issue a VAT invoice to the customers.
A supplier’s VAT invoice (sales invoice) shall contain, among others, the TIN, invoice number, name and address of the supplier, supplier's incorporation or business registration number as applicable, the date of supply, name of purchaser or client, gross amount of transaction, the VAT charged and the rate.

VAT is a federal tax. The monthly VAT returns are sent to, and payments made to, the NRS.

Input VAT and output VAT

The input VAT refers to the VAT paid by a taxpayer to vendors or suppliers of taxable supplies. This happens when you buy goods, services and fixed assets for use in the production of taxable supplies (saleable goods and services). And, inversely, the output VAT refers to the VAT charged in your VAT invoices (sales invoices) to your customers.

Where the output VAT exceeds the input VAT, the excess is paid monthly to the relevant NRS tax authority.

But where the input VAT exceeds the output VAT, the taxpayer is entitled to utilise the excess tax as a credit against subsequent months. NTA Section 156(1)(a)(b).

Next: Non-payment of VAT nullifies the allowability of expenses and capital expenditure in profits ascertainment.