Now everyone of you that make legal living out of online, be ready to start paying your VAT/Tax as at when due. Indeed, it will never be a business as usual again, for every profit you make online, be rafy to pay your VAT/Tax.

However, pending the time government is able to put policy in place, Oga Seun Osewa can enjoy the proceeds from Nairaland.com

See the reason below

The popular blogger, Ms. Linda Ikeji recently acquired a property well above $3 million in the expensive Banana Island, in Lagos State.

Congratulations to Linda Ikeji for her new house. That is truly bold for a blogger to live in a mansion of $3M. It means she has many multiples of that. Her hard work, tenacity and focus has paid very well.

Unfortunately, her open display of wealth will change tax policy in Nigeria. Someone had noted that it is likely that Federal Internal Revenue Service, the tax office, will send her a bill for VAT. Few internet companies pay tax in Nigeria because they have no office but laptops which the tax office cannot easily trace and pursue. Besides VAT, there is also corporate tax.

We are not saying that Linda Ikeji Blog is not paying VAT or tax, but our understanding is that by her success, government will begin to find ways to improve its revenue collection capabilities in digital business. Most web companies make more than meatspace-business who are forced to pay taxes because they have physical domains and physical products which can be easily traced and taxed.

Few companies in Nigeria will make a profit of $3M over 6 years, the total number of years Linda has operated her blog. If she was able to save $3M, it means she must have made more. The big question – how much tax did she pay? Government will likely try to find out. As they do that, other Internet companies will be scrutinized.

We think at the end, banks will be asked to assist government. As advertisers pay money into her bank accounts, was Linda Ikeji Blog paying VAT ? But irrespective of her experience, government is already waking up that internet has a lot of wealth and it needs to take taxes.

No matter what you think, making a profit of $3M for running a business for 6 years is simply unprecedented in Nigeria when government contracting is not involved. That is the future and why entrepreneurship is a web generator than anything in human history. Government needs to understand that paradigm and begin the process of changing tax policy.



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She ought to be paying tax without being told!