Beginning in January 2023, MTN, Airtel, and all money deposit institutions serve as agents; for the Federal Inland Revenue Service (FIRS) in the collection of VAT.
The decision is in accordance with the terms of Section 14(3) of the Value Added Tax Act Cap. VI LFN 2004, which allows the firms to withhold or charge VAT on all taxable deliveries made to them.
According to the statement, businesses must pay the service the tax collected, in the currency of the transaction.
“The tax withheld or collected pursuant to this notification shall be remitted in the form provided by the service. A provider whose output tax is withheld in accordance with the terms of this notice may deduct from the output the input tax paid; on the items bought or imported to create the taxable supply.
The balance is refundable to the supplier, if the input tax paid to create the supply is not fully recovered; from the output tax on other taxable services collected on other taxable supplies.
If the supplier is eligible for a refund, it may seek a cash pay-out or use the refundable amount; to reduce future VAT obligations.