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  • Nigerians To Pay VAT On Amazon, Other Digital Services – Finance Minister

    Nigerians To Pay VAT On Amazon, Other Digital Services – Finance Minister

     

    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, VAT 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.

     

  • Only FIRS Should Collect VAT And Share, Not States, Says Umahi

    Only FIRS Should Collect VAT And Share, Not States, Says Umahi

    Ebonyi State Governor David Umahi says the state is not in support of Rivers, Lagos  and other states in their moves to collect Value Added Tax.

     

    Umahi stated this at a dinner organised in honour of a former Chief of Army Staff and Nigerian Ambassador to the Republic of Benin, Amb. Tukur Buratai, on Monday night.

     

    Umahi said Ebonyi was solidly and would continually throw its weight behind the Federal Inland Revenue Service’s collection of VAT.

     

    Speaking at the dinner held at the Governor’s Lodge, Centenary City, Abakaliki, Umahi reiterated that the state would not support any of the states collecting VAT, adding “Evil will continue to thrive if good people keep quiet.”

     

    He said, “We must make Ebonyi State very exceptional by rising to the challenges. When we shout true federalism, I say, I agree; but it should be administrative restructuring.

     

    “Ebonyi State is not in support of any state collecting VAT. We are in support that FIRS should continue to collect tax and share.”

     

    While urging the country’s leaders to speak up against dissenting voices that were capable of polarising the nation, Umahi stressed he was open to debate with any governor from the stable of the Peoples Democratic Party, who felt he had delivered more democracy dividends to his people than the APC-led administration in Ebonyi State.

     

    “People are taking special interest in Ebonyi State and her Governor, positively and negatively; but it is very important to be in the news than for you to say there are 36 states, you will name 35 and say what is the other state?

     

    “We have aborted it; we are now a state to reckon with and we have no apologies.

     

    “When I say I have no apologies, you can talk everything about me but you can not say we have not delivered and so when people open their mouths in PDP to talk about APC, they should know that I belong to APC and if they like, let PDP offer any of their best Governors to come for debate with me and I will defeat any of them; it’s not just to be talking and talking. You don’t sit on people’s sweat and resources and be talking nonsense.

     

    “We have no regrets taking our people to the centre. We have always played at the centre. We are not playing party politics, we are playing politics that will be an advantage to our people, criticise me; no problems. But we need resources, we need friendship with the centre,” Umahi stated.