Pay Withholding Tax To FCT-IRS, FCTA Charges MDAs, Contractors

By: Wisdom Acka

The Federal Capital Territory Internal Revenue Service (FCT-IRS) has urged Ministries, Departments and Agencies (MDAs), as well as contractors in the FCT to ensure accurate remittance of withholding tax to the Service.

The call became necessary following payment of withholding tax to wrong tax authorities.

A statement signed and released to the media by the head, FCT-IRS Corporate Communications, Mustapha Sumaila, has said.

It stresses the necessity for taxpayers to understand that withholding tax was for limited liability companies and is remitted to the Federal Inland Revenue Service (FIRS), while withholding tax for enterprises and individual contractors is payable to the State IRS, which is FCT-IRS, in the case of FCT.

The statement reads in part: “Regrettably, we have observed instances where the wrong tax jurisdiction is entered on the Government Integrated Financial Management Information System (GIFMIS) platform by the MDA desk officers.

“This error can lead to contractors suffering the loss of withholding credit and the relevant tax authority experiencing revenue loss. The beneficiary of the withholding may also be denied the withholding credit,” the statement said.

It added, “To prevent such losses, we urge all MDA desk officers to ensure accurate data entry at the point of initiation. We also wish to draw the attention of enterprises and individual contractors in the FCT to this issue and caution them of the potential consequences”.

It however, warned that the FCT-IRS would not grant tax Clearance certificate on withholding credits wrongly sent to another tax jurisdiction by the Government Integrated Financial Management Information System (GIFMIS) platform.

“Our aim is to ensure a seamless tax administration system that supports compliance, promotes ease of doing business, and upholds the principles of transparency and accountability,” the statement emphasized.

He recalled that the FCT-IRS took over the administration, collection, and accounting of taxes in the FCT in 2018, prior to which, the FIRS was responsible for these functions.

According to the statement, “With the advent of GIFMIS, payment for contracts and the deduction and remittance of the withholding tax for both companies, enterprises, and individuals is done using the GIFMIS platform”.