Nigerians may have to pay more for digital services as the Federal Government has introduced a policy requiring foreign companies that provide digital services in the country to collect and remit Value Added Tax to the Federal Inland Revenue Service.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said this during the public presentation of the 2022 budget in Abuja on Wednesday.

She said that the new policy is contained in Section 30 of the Finance Act which amended the provisions of Section 10, 31 and 14 on VAT obligations for non-resident digital companies.

The Minister said, “Section 30 of the finance act designed to amend section 10, 31 and 14 of VAT is in relations to VAT obligations for non-resident digital companies and the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria who can’t themselves self-account for VAT.

“So if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for.

“I am using Amazon as an example. We are going to be working with Amazon to be agreed to be registered as a tax agent for the FIRS.

“So Amazon will now collect this payment and remit to FIRS and this is in line with global best practices, we have been missing out on this stream of revenue.

For clarification, the Minister said, the new law applies to foreign companies that provide digital services such as, “apps, high-frequency trading, electronic data storage, online advertising” among others.

Speaking further, Ahmed noted that in line with Section 4 of the Finance Act, non-resident companies are now expected to pay tax at 6 per cent on their turnover.

The Federal Government had in 2019 disclosed plans to tax foreign digital service providers offering services to Nigerians according to amended provisions in the 2020 Finance Act.

However, this is the first time the government is setting a specific tax rate.

Ahmed said, “Section 4 of the ACT which is taxation of e commerce businesses owned by non-resident companies on a fair and reasonable turnover basis has been set at 6 per cent.

“This provision empowers FIRS to access non-resident firms to tax on fair and reasonable basis of turnover and from digital services provided to Nigerian customers.”

She said the move was aimed at modernizing the taxation of Information Technology and the digital economy in line with current realities, adding that this is in conformity with the provisions of the National Development Plan 2021 – 2025.

Earlier in December 2021, Facebook, in a statement, disclosed that it will, from January 1, 2022, begin to charge VAT on the sale of advertisement to advertisers, regardless of whether they’re buying ads for business or personal purposes.

FarahAideed:
VAT means Value Added Tax ...Can the FG tell us what Value is being added to digital service that we need to be taxed for after being taxed to even come online ? What is the the Value Added ?

We already pay tax to even come online in the first place , it's not like we are using some new Value the Buhari govt enabled for us to attract me Value Added Tax..the people that need to be VATTED are the bandits because they are the only people Buhari has created extra Value for since he came

Blackfire:
Nice one


We the youths are solidly behind our darling president

AntiBeEmCe:
This govt, starring that ol0sho finance minister is causing all-time high inflation by taxing everything, save for breathing.

People are dying due to high cost of living in Nigeria since this govt took over.

They add taxes to flour, making bread that used to be very affordable, less affordable.

They did same with cooking gas, now people are reverting to less modern ways of using fire to cook.

You subscribe data, it won't last cos everytime you turn on and off ur network, they're minusing VAT.

You receive money in ur bank account, they're minusing VAT. You send, same thing. USSD codes are no longer left out. Every single transaction you carry out, they are minusing one thing or the other

Importation fees are now so high since this maladministration began. You buy things online and by the time you want to check out...you see stupid exorbitant tax rates and shipping fees that is often times higher than the items you purchased. During the last regime, it wasn't like this.

Still, they have borrowed the most loans since almagamation. All the taxes they collect, is nowhere to be found.

This country was cvrsed with this abomination called govt.
Tufiakwa!

Ovamboland:


This one even said LPG price increase because of mere 7.5% VAT but we see prices going up 300%. Smart people know the world production cost has gone up, but dumb people must have their say.
Shippers have increased prices worldwide impacting global prices of goods, but to dumb Nigerian it's only because of local taxes.

Something that cost 100 will now cost 107:50 considering VAT but when it now cost 250 dumb will be shouting it's tax. If you stop VAT will the price go back to 100?

Ovamboland:


See dumb post

AntiBeEmCe:


Caman shatap der, third-class z0mbie.
Who are you telling that rvbbish? Someone who hasn't been abroad or who doesn't have people staying abroad?

The gas that we are not importing because we have it in abundance...to the point that, it is being flared cluelessly. We woke up one morning and the price jumped 400% ....and ur spewing utter garbage this morning. Better carry ur daftness out of my mention.

Ovamboland:


This one even said LPG price increase because of mere 7.5% VAT but we see prices going up 300%. Smart people know the world production cost has gone up, but dumb people must have their say.
Shippers have increased prices worldwide impacting global prices of goods, but to dumb Nigerian it's only because of local taxes.

Something that cost 100 will now cost 107:50 considering VAT but when it now cost 250 dumb will be shouting it's tax. If you stop VAT will the price go back to 100?

Ovamboland:


See dumb post