REALITY101: The real question is, what is Nigeria government going to do with the money?

No they don't need to pay shiit

what sort of mentality is this?

saintvalx: Truely this is a joke. Do some of the top citizens in this country pay tax?

YES & NO
Yes bc it's right for them to pay
NO bc we the common man won't see the effect of the tax.
CORRUPTION ALL THE WAY!!!!!!!!!!!!!!!!

Afam4eva:
You only pay tax for service been rendered to you. What service is the Nigerian government rendering to Twitter and facebook?

who is this shallow minded fellow,for educational purpose Tax is quid proquo that is tax payers cannot claim something equivalent to the tax paid from the government,a tax is not levied in return for any specific service rendered by the government to the tax payer

REALITY101: The real question is, what is Nigeria government going to do with the money?

No they don't need to pay shiit

what does the US govt do with the huge taxes they generate?
Waste it on wars,right?

Dey should pay tax from d profit earned in Nigeria. If they are not incorporated in Nigeria, then dey should pay d individual tax on advertising income from Nigeria.

call 08097038920 for ur shell ptdf past ques and ans

Hi Nairalanders, from my little knowledge of the Nigerian Tax Law ( Company Income Tax Act 2004 CITA LFN. 2004- as amended) the following issues are pertinent with regards for a company to pay tax in Nigeria
1. The income must have been earned in and from Nigeria. But a caveat pls. This means they must be physically present in Nigeria to have earned it. Eg British Airways pays tax on income derived from Flight originating From Nigerian Airport going outside and not income from those conveyed into Naija.
2. Such a company must/should have a subsidiary in Nigeria and a parent company outside
3. Must be incorporated in Nigeria
4. Must have filled tax returns to FIRS within 18 months after commencement of operations or 6months after year end, whichever is shorter.
As it stands in mine own opinion I don't see this as feasible yet cos:

a. no physical presence in Nigeria
b. no existing law to compel them to submit their returns to FIRS. to determine the income earned FROM Nigeria originating advert.
c. they already pay tax in their home country and this would tantamount to double taxation. Except a relief be brought in place.
d.none of their Principal agent is resident in Nigeria.

To sum up, globalization calls for a review in tax laws and operating systems in view of the modern trend in e- commerce.

The above submission is opened to constructive criticisms from tax professionals in the house for us to learn better.

Delafruita:
people wont even understand topic before making ridiculous comments.

the tax in question is on the revenue they generate from advertisement.we all know online platforms are free but then they make money from adverts.all these companies pay tax in america so why shouldnt they pay tax on adverts that originate from turkey or even nigeria?facebook makes a lot of money from adverts in nigeria,same as google.

NoteD

..

please am new here hu is this suen,that hides posts?

The general rule regarding taxation of foreign company in Nigeria is:

If company is not a Nigerian company, does not have a 'fixed base' in Nigeria, and performs the service outside Nigeria, it is not subject to Nigerian income tax.

Now, let's put Facebook, Twitter and Google to these tests:

1, Definitely not a Nigerian company
2, No fixed base in Nigeria (not aware of Facebook or Twitter having office in Nigeria- but I think there is Yahoo office in Nigeria - so Yahoo may have failed thsi test.)
3, The contentious part is whether the service is performed in Nigeria - this may be debatable. Twitter and Facebook may claim they perform all the programming and whatever makes teh advert show in Nigeria, right from their US office. Nigerian government may claim they earn the revenue in Nigeria. Not sure, I will be able to have a definitive conclusion on this, but I'm inclined to concluding Twitter and Facebook have stronger case, based on how the tax law stands today - they performed teh service from US.

I think there should be a fresh set of laws guiding internet taxation.

Afam4eva:
You only pay tax for service been rendered to you. What service is the Nigerian government rendering to Twitter and facebook?

Tax is not price, that you pay for service being rendered to you. If you earn income within a territory, you are subject to that territory's tax, irrespective of whether you enjoyed anything in that territory.

Yep they can all be taxed in Nigeria
One way of doing this is to pay tax at the point of purchase
All it needs is a great design and legislation to make it work
Thats why we went to school... to think out of the box

As far they earn income in Nigeria, they should by subject to Company Income Tax just like the Airline Operators. They tax will be based on the proportion of Income they earn in Nigeria.

Online engine and social network have earned more and more frm their online advertisement services such website generally withdraw the online advertisement payment by credit card and the money goes abroad instantly without being taxed

Will they also tax CNN, Aljazeera and other international TV, cos they transmit into Nigeria air space
I don't think taxing them will make sense.

sainty2k3: Will they also tax CNN, Aljazeera and other international TV, cos they transmit into Nigeria air space
I don't think taxing them will make sense.

In regard to government monitory of social media, there are already plenty of instances where informatn collected through both twitter and facebook has been used to file criminal charge against individual just week, new york officials announced the indictment of 63 East harlem gangmembers whose movement were tracked with the help of clues they left behind on there social media account U CAN SEE NOW IS WISEABLE TU PAY TAX

They can be made to pay tax if everything is right irrespective of whether they have an office here or not.

But, it is only natural to expect fb to increase their advertisement charges once tax comes in. This could potentially lead to a slow business because not many people will be willing to use fb to market their business again and trust me, any online business nowadays, especially those whose content are meant for outsiders, is dead without fb or google.

Moreso, increment in advert rate brought about by the introduction of tax can also increase the cost of doing business locally, impeding growth. I tell you everything being equal, we could be hurting ourselves thinking we're hurting fb,google or yahoo.

The only advantage is local social media will sell; Yes, Seun is one of them.

Afam4eva: Do they have a physical presence in Nigeria? If they pay tax to Nigeria then they will pay tax to every country in the world except North Korea.

To add to my previous comments on why Google and FB and Twitter and their rest should pay taxes under the "physical presence" argument, citing the China example, Google was forced to open Google China. Google today has presence in MOST Asian countries (China, Japan, SK, etc) due to this evading laws even including the EU (the 17 countries or more making up the EU). Therefore, they couldn't bypass this law thus forcing them to pay necessary tax liability under the "tax liability when revenue is earned".

Again my argument still stands, if you earn income in Nigeria, and from Nigerians, and you're a corporate entity, yo should be subject to Tax laws..... PERIOD. This includes Advertising revenues, sale/products/service revenues, and all sort of earned revenues... Pay your taxes, after all, U.S. taxes them anyway. U.S. isn't the only country good for taxing companies. This is why Tim Cook of Apple bluntly said "as CEO of Apple, he has the fiduciary responsibility to shareholders of NOT bringing monies back into the U.S. because of double taxation" just like other Corps do.

Just waiting to see how this whole scenario will occur... Moroever if tax is stil imposed, am very sure... We wil suffer it, except you don't nomally buy ads on facebook...

takeprofit: One day i asked my chinese supplier to help me pay for something from a US owned website with paypal. he told me the chinese govt does not allow him to buy things outside china. he must look for that thing or its alternative within china. i felt like a fool buying things from him.

most foreign countries usually don't accept that
my friend's uncle sent him samsung galaxy 3, he had to pay some tax before they released the phone
They asked him why he didn't buy it here in Germany.

sainty2k3: Will they also tax CNN, Aljazeera and other international TV, cos they transmit into Nigeria air space
I don't think taxing them will make sense.

You are missing the point brother. The tax is not about using airspace or cyberspace.

The tax is about the money Nigerian advertisers pay from Nigeria. Taxing it is fair IMO.

vandarsar: They can be made to pay tax if everything is right irrespective of whether they have an office here or not.

But, it is only natural to expect fb to increase their advertisement charges once tax comes in. This could potentially lead to a slow business because not many people will be willing to use fb to market their business again and trust me, any online business nowadays, especially those whose content are meant for outsiders, is dead without fb or google.

Moreso, increment in advert rate brought about by the introduction of tax can also increase the cost of doing business locally, impeding growth.

You have a pint there. If a tax occurs, fb might want to pass it on to the advertisers. If the govt wants to charge lets say 5% on revenue, facebook will simply add 5% to the amount we spend to advertise.

vandarsar: I tell you everything being equal, we could be hurting ourselves thinking we're hurting fb,google or yahoo.

I dont think they are doing it because they WANT TO HURT google and facebook. If they do it, they will be doing it cos its the law to tax and generate revenue for the government.

I'm learning a lot on this thread.
Good job, people

In reality, tax on advertising revenue can be imposed as Witholding or VAT and it would be the duty of the company who advertises with these social media to withold and remit the money to the relevant tax agency I.e. VAT to FIRS and WHT to state where that company is resident.

VAT is 5% WHT is also 5%

akinalabi:

You are missing the point brother. The tax is not about using airspace or cyberspace.

The tax is about the money Nigerian advertisers pay from Nigeria. Taxing it is fair IMO.

☀̤̈kα̲̅¥ , but will they monitor that, and I hope nairaland too will pay tax

sainty2k3:

☀̤̈kα̲̅¥ , but will they monitor that, and I hope nairaland too will pay tax

All social network in this world should pay tax