Minister of Finance, Budget and National Planning, Zainab Ahmed has disclosed that\u00a0Nigerians may have to pay more for digital services.<\/p>\n
Recall that the\u00a0Federal 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.<\/p>\n
This was made known by the Minister of Finance, Budget and National Planning, Zainab Ahmed during the public presentation of the 2022 budget in Abuja on Wednesday.<\/p>\n
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.<\/p>\n
The Minister said, \u201cSection 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\u2019t themselves self-account for VAT.<\/p>\n
\u201cSo if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for.<\/p>\n
\u201cI 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.<\/p>\n
\u201cSo 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.<\/p>\n
For clarification, the Minister said, the new law applies to foreign companies that provide digital services such as, \u201capps, high-frequency trading, electronic data storage, online advertising\u201d among others.<\/p>\n
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.<\/p>\n
The Federal Government had in 2019 disclosed plans to tax foreign digital service providers offering services to Nigerians\u00a0according to amended provisions in the 2020 Finance Act.<\/p>\n
However, this is the first time the government is setting a specific tax rate.<\/p>\n
Ahmed said, \u201cSection 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.<\/p>\n
\u201cThis 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.\u201d<\/p>\n
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 \u2013 2025.<\/p>\n
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\u2019re buying ads for business or personal purposes.<\/p>\n","protected":false},"excerpt":{"rendered":"
Minister of Finance, Budget and National Planning, Zainab Ahmed has disclosed that\u00a0Nigerians may have to pay more for digital services. Recall that the\u00a0Federal 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. This was made known […]<\/p>\n","protected":false},"author":17,"featured_media":120701,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_override_bookmark_settings":[],"jnews_override_counter":[],"footnotes":""},"categories":[2],"tags":[6184,371,1180,17640,958],"class_list":["post-130190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","tag-amazon","tag-fg","tag-firs","tag-value-added-tax","tag-zainab-ahmed"],"yoast_head":"\n