FIRS new excel sheet upload to file VAT returns is counter productive - NIGERIAN NEWSORBIT


Monday, May 01, 2023

FIRS new excel sheet upload to file VAT returns is counter productive

By Dr Gbenga Adeoye

Let me start with three proverbs, if they don't want you in a city, do not raise song. If you do, nobody will join you to sing it.
Tax is not something people enjoy to pay especially when they cannot see corresponding benefits; Hence,  making it difficult is like someone not wanted in a city raising songs.(Yoruba Proverb)

The second proverb is that a man they want to roast as suya that rub palm oil on his body and then stand beside fire thereby making the work of those who want to roast him easy.

When people are looking for how to avoid tax, do not compound the problem by making payment difficult for them.

The last proverb is that palm oil and white clothes are not friends.Tax payers and difficult payment systems are not compatible.

 Any student of Taxation knows that one major principle of tax administration is that it must be easy to pay. This is hinged on the Canon of Convenience among others by Adam Smith.

Recently, acceptance certificate for asset worth N500, 000 was discussed extensively and 99% of Nigerians are of the opinion that such policy is outdated because even just one laptop and table is in excess of N500,000 and asking people to go get any acceptance certificate is more or else an attempt to impose unnecessary burden on SME's... Some FIRS Team still ask for this during audit when we all know it is unreasonable. There are other ways to verify asset cost.

 Let me return to the main subject of the day, March 2023 VAT filing which was meant to be filed on or before April 21 suddenly requires that you upload an excel sheet showing the following : name of your customers/ client, Tax Identification Numbers, Amount of Sales, Code representing nature of transaction which is either of the following, O for Vatable, one for Zero Rated, two for exempted,  Type of Services
 or product and description of product or service.

As a matter of fact a video was posted on Tax Pro Max asking that each sheet can take 1000 line items.(Funny Numbers)
How do you begin to fill an excel sheet Containing all the above fields with 1000.?
 You will not actually be able to file if you sell items in pieces such as soft drinks.

.FIRS claimed that once you indicate the TIN of a tax payer; the respective  VAT against such tax payer will go to the system as input VAT as a second leg. Hence, there is no room for you to post local purchases that will enable you to claim or enjoy input VAT.

The question is; does FIRS think all tax payers will file at the same time.? If the person you bought from is yet to file, it means you will have no input VAT. That means you will have to pay double VAT.

Most companies CEO's could not sleep from 19th to 21st of April 2023 all over Nigeria because many couldn't file the VAT. Some eventually chose to give up. Another issue about VAT is that FIRS is yet to understand the reality in business and a good example is as follows.

You buy goods for N100,000. You sell with 2% profit. Meaning you sell for N102,000.

In any case, because of competition, you cannot sell above N102, 000 and no buyer will listen to your explanation that you actually charged VAT on it and as such price had to be higher than N102, 000.

Meanwhile, Most times where you bought from, there is nothing like input VAT in your favour and as such, FIRS is looking at your sales of N102, 000 and asking you to come and pay VAT of N7,650.(Quite Logical ? Isn't it? But Very unreasonable and against ease of doing business and a show of lack of understanding of industrial practice in such sector)

Once you pay N7,650 as expected, your profit of N2,000 is gone. Then FIRS takes another N5,650 from your trading Capital.

Do you think any businessman is stupid to pay such.?

Assuming you are trading with N100,000 and you pay the N7,650, which is rare, but let us assume you actually pay, if the business maintained the same level of transactions over a period of 18 months, the entire Capital would have been wiped off in the name of VAT without considering overheads.
 For so many tax payers; nothing was shown as input VAT and yet no room for posting cost which the system uses to calculate input VAT.

Many posted their cost to Imported Cost so that their actual VAT can be seen. The Excel sheet introduction is not going to work when it comes to input VAT claim because the entity you bought from may not have filed as at the time you are filing and as such, there should be a space for the posting of local purchases.

Over the counter transactions also does not give room for you to start asking for Tax Identification Numbers of customers. Yes it is also there that you can put zero if you don't know the TIN, but the question is why the stress.?

Suggestions to FIRS.

Allow normal VAT filing to continue as it used to be.
You can ask for schedule of sales as mere additional documents with or without TIN and where customer's name is unknown, allow tax payers to insert "VARIOUS" to combine many customers... The truth is that such favours FIRS in that no one will claim such VAT as input anyway.

Leave the role of requesting for additional information with various tax offices. They know what to do to validate claims of sales and purchases.

Use VAT monitoring and Audit exercise to cross-check records of filings and stop stressing tax payers with unreasonable additional burdens.


The newly introduced system is counter productive and that account for why FIRS had to extend filing till April 30 for March VAT.

If step is taken to verify collection for the month of March, it will be below expectation. .FIRS and indeed all agencies dealing with the public should engage stakeholders and Professionals before introducing any policy.

Please note that many companies have not recovered from the damage done by CBN Naira redesign policy on the Economy and so, introducing this new filing method will amount to adding salt to injury

Such pain is not good at the time of tax payments as it negates Canon of Taxation and contrary to ease of doing business because productive time is wasted on irrelevant and counter productive exercise. 

All these circulars going around about seminars on the new policy should be converted to apologies to tax payers as it constitute medicine after death where cart have been put before the horse.

The Author. 

Dr.Gbenga Adeoye is a Lawyer and a Fellow of the Institute of Chartered Accountants of Nigeria.

He is also a Fellow of the Chartered Institute of Taxation of Nigeria 

He is an Arbitrator of the United Kingdom and Nigeria.

He is Passionate about Social Economic Development of Nigeria and Africa.

He is an advocate of Tax Justice and Ease of Doing Business in Nigeria.

He can be reached via [email protected]

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