The Federal Inland Revenue Service (FIRS) announced that items that are not considered buildings will be subject to a 7.5 percent value-added tax (VAT) starting from September 1, 2023.
This was disclosed by Muhammad Nami, the executive chairman of the revenue agency, in a public notice over the weekend.
FIRS – VAT to apply to TV masts, cell towers, and more non-building items.
The FIRS explained that some of the items that are not regarded as buildings include radio and television masts, transmission lines, cell towers, mobile homes, caravans, and trailers.
FIRS stated that this provision was part of the Finance Act 2023, which was initially supposed to take effect from May 1 but was postponed to September 1.
“The VAT Act was amended in Section 46 to exclude any fixture or structure that can be easily removed from the land from the definition of “building”,” the notice said.
“Therefore, all the items that are no longer classified as land will be liable to VAT. Companies that lease, trade, or provide services with such items must charge VAT at the current rate from September 1, 2023.”
FIRS also said that Section 14(3) of the VAT Act was changed to require that persons who are appointed to withhold or collect VAT must remit the VAT they withheld or collected by the 14th day of the month after the month in which they withheld or collected the VAT.
“As a result, all VAT that was withheld or collected in August 2023 must be remitted to FIRS by September 14, 2023,” the notice said.
“Likewise, VAT that was withheld or collected in subsequent months must be remitted to FIRS by the 14th day of the month after the month in which they withheld or collected the VAT.”
The commission said that the rate of tertiary education tax (TET) was increased to three percent of assessable profits.
“The new TET rate of 3% will apply to TET that is due for accounting periods ending on or after September 1, 2023,” FIRS said.
Regarding investment allowances and convertible currencies, FIRS said that sections 32, 34, and 37 of the Companies Income Tax Act (CITA) granted allowances for capital expenditure incurred under certain conditions, and tax exemption for income earned in convertible currencies from tourists by hotels were repealed.
This means that these allowances and tax exemptions will not be available for tax returns that are due for accounting periods ending on or after September 1, 2023.
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