Nigeria’s Federal Inland Revenue Service (FIRS) has implemented significant updates to enhance the Value Added Tax (VAT) compliance processes on its ICT-based tax compliance platform known as TaxPro MAX. The revisions impact Sales, Purchases, Sales Adjustments, and the VAT Returns Form. Below are 15 key notes elucidating the changes on the Platform and their implications for your VAT compliance process:

A. Sales:

  1. You must now upload a duly filled Sales Schedule as part of your VAT Returns filing process, providing details on all sales transactions during the relevant period.
  2. The downloadable Sales Schedule template in MS Excel on TaxPro MAX requires specific information such as customer/client details, tax identification number (TIN), item/service details, cost/price, description, and VAT status.
  3. The “VAT Status” indicates whether the transaction is VAT-able, zero-rated, or VAT-exempt.
  4. Uploading the Sales Schedule automatically populates the Sales page on TaxPro MAX.
  5. Selecting the “Returning Currency” is necessary, but it currently does not support multiple selections for cases involving VAT payments in multiple currencies.
  6. A maximum of 1,000 sales transactions can be uploaded in each Sales Schedule.
  7. An “Item ID” is automatically generated for each line of sales transaction.
  8. The Sales Schedule is crucial for the Input-Output Tax set-off system, impacting the reflection of Input Tax on the Purchases page.

B. Purchases:

  1. After completing the Sales page, TaxPro MAX directs you to the Purchases page, where minimal input is required as relevant data is obtained from the Sales Schedule uploaded by your sellers/suppliers.
  2. Input Tax can be claimed on the Purchases page in line with Section 17 of the VAT Act.
  3. FIRS may use desk review or field tax audit processes to correct Input Tax errors.

C. Sales Adjustment:

  1. After the Purchase page, TaxPro MAX guides you to the Sales Adjustment page, allowing adjustments for returned sales of a prior period.
  2. The Sales Adjustment process utilizes the “Item ID” generated from the Sales Schedule upload.

D. VAT Form:

  1. From the Sales Adjustment page, you proceed to the VAT Form page to make needed adjustments on Closing Inventory, Purchased Imports, and VAT on Imports, with pre-filled fields by TaxPro MAX.
  2. Closing Inventory adjustments ensure Input Tax does not exceed Output Tax.

E. Our Concluding Commentary:

The Purchases page’s dependency on data from uploaded Sales Schedules poses a notable challenge for TaxPro MAX. While FIRS aims to fully automate the VAT filing process, effective stakeholder engagement, quick issue resolution, communication, and progressive updates are crucial. TaxPro MAX should be treated as a world-class Software as a Service (SAAS) platform, meeting high standards for efficient service delivery. Stakeholder feedback should guide impactful updates for a well-paced system. The FIRS and taxpayers should demand and uphold the best standards for TaxPro MAX as a service.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.