Companies in Nigeria to Pay Dollar Debts in Naira

Because it is challenging to get dollars, Nigeria has allowed enterprises with outstanding foreign currency tax bills to pay in Naira.

The Federal Inland Revenue Service has offered debtors a one-month opportunity to settle in local currency, according to an emailed statement from the Abuja-based agency on Tuesday. According to the statement, the concession will cease at the end of March.

When oil prices fell due to the coronavirus outbreak in 2020, Nigerian producers struggled to get enough dollars to import raw ingredients and pay taxes. In the last two years, the Central Bank of Nigeria has rationed the flow of US money and devalued the Naira three times.

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While the price of crude has risen to its highest level since 2008 as a result of Russia’s invasion of Ukraine, the increase has yet to be reflected in Nigeria’s currency supply.

Companies in Nigeria are required to pay tax in the currency of the transaction. The tax agency “would no longer entertain any such requests” to clear the debts in Naira after the one-month window expired, it said.

According to the agency, the concession is accessible to all taxpayers with foreign currency liabilities due on or before December 31, except for enterprises in the upstream oil and gas sector. The Naira payment would be based on the official exchange rate on the transaction date and/or when the tax is payable, according to the statement.