- Starting from January 1, 2023, telecommunication giant MTN Nigeria Communications PLC (MTNN) will begin to withhold Value Added Tax (VAT).
MTN Nigeria to begin withholding VAT as appointed by the Federal Inland Revenue Service, FIRS. With this, MTN will now double as a VAT Deduction Agent. The FIRS has conceived this move to increase tax collection and improve tax remittance.
This means that the telecommunication company now has the responsibility of withholding the Value Added Tax (VAT) due on all the jobs awarded to its contractors, and remitting it directly to the FIRS.
This initiative is in line with the lowered vested on the FIRS in Section 14(3), the Value Added Tax Act.
As part of its duties, MTN Nigeria is also required to prepare and forward, monthly, schedules reflecting complete details of relevant contractors/transactions.
This is to ensure a transparent system that fully accounts for the VAT collected on behalf of the tax body.
MTN Nigeria To Begin Withholding VAT: Recent Success
It was recently reported that Subscribers of MTN Nigeria Communications PLC paid up to N31.62 billion as Value Added Tax (VAT) on calls and data in Q1, 2022.
The number is based on the N421.49 billion the telecommunication company made from calls and data in the first three months of 2022, for which a statutory 7.5% consumption/transaction tax is imposed as VAT and deductible at source.
According to the information contained in the company’s Q1 2022, the N421.49 billion earned in the first quarter of 2022 represents a 20.32% increase from the N350.31 billion it made from voice and data in the corresponding period of 2021.
This means that MTN subscribers contributed up to N26.28 billion as VAT, representing 7.5% of the N350.31 billion that the company made from calls and data in the corresponding period of 2021.
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