TAX – Nov 2021 – L2 – Q3b – Value Added Tax (VAT)

Explanation of penalties associated with VAT non-compliance including failure to register, failure to notify of address changes, and failure to submit returns.

Question

Explain the penalties associated with the following:

i. Failure to register for VAT return (2 Marks)
ii. Failure to notify the FIRS of change of address or cessation of trade or business (2 Marks)
iii. Failure to submit VAT returns (2 Marks)

Answer

i. Failure to register for VAT:
A taxable person who fails to register for VAT is liable to a penalty of N50,000 for the first month in which the failure occurs, and N25,000 for each subsequent month in which the failure continues.

ii. Failure to notify the FIRS of change of address or cessation of trade or business:
If a person fails to notify the FIRS of a change of address or cessation of trade or business, the penalty is N50,000 for the first month in which the failure occurs, and N25,000 for each subsequent month in which the failure continues.

iii. Failure to submit VAT returns:
A taxable person who fails to submit VAT returns is liable to a penalty of N50,000 for the first month in which the failure occurs, and N25,000 for each subsequent month in which the failure continues.

Tags: Non-compliance, Penalties, Registration, Returns, VAT
Level: Level 2

Topic: Value-Added Tax (VAT)
Series: NOV 2021

Uploader: Kwame Aikins