DEDUCTION AT SOURCE OF WITHHOLDING TAX (WHT)/VALUE ADDED TAX (VAT) ON COMPENSATION PAID TO AGENTS, DEALERS, DISTRIBUTORS, AND RETAILERS BY PRINCIPAL COMPANIES

| Thursday 15th August, 2019

       

The Federal Inland Revenue Service (the Service) recently issued a public notice that all compensations due to distributors and agents by whatever means of payment, either by cash, credit note and goods-in-trade must be subjected to WHT/VAT at the appropriate rate and be remitted to FIRS accordingly on or before 21st of every month. This is line with Paragraph 3.8 of Federal Inland Revenue Service Information Circular No. 2006/02 (Feb 2006)


This notice is as a result of non-compliance in deducting WHT/VAT from compensation paid to distributors and agents by all companies, particularly those in the Fast Moving Consumer Goods (FMCG) sector.

We urge all companies to comply with the public notice as the Service will commence monitoring the compliance levels of relevant companies.