- Nigerians will pay taxes for online purchases on businesses that are not resident in Nigeria but provide digital services to Nigerians
- Buyers on e-commerce platforms like Amazon, Facebook and others will have to pay VAT
- Finance Minister Zainab Ahmed said this during the 2022 budget presentation in Abuja on Wednesday January 5, 2022.
From January 2022, Nigerians who visit Amazon, Facebook and other e-commerce platforms not residing in Nigeria will have to pay VAT on items purchased online in a new law intended to generate more income for the Federal Government of Nigeria.
Zainab Ahmed, Minister of Finance, Budget and National Planning, said so during the public presentation of the 2022 budget in Abuja on Wednesday, January 5, 2022.
The Punch reports that this is a new policy contained in the new finance law that requires foreign companies that provide digital services in Nigeria to collect and remit VAT to the Federal Inland Revenue Services (FIRS).
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New year, new law
According to the minister, the new directive is contained in article 30 of the finance law which amended the provisions of articles 10, 31 and 14 on VAT responsibilities for companies not resident in Nigeria but providing services. digital to Nigerians.
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The Minister said Article 30 of the Finance Law is created to amend Articles 10, 31, 14 of the VAT regarding VAT obligations for non-resident digital businesses and the tool that will be used is to limit VAT obligations mainly to digital. non-resident companies supplying Nigerians who cannot declare VAT themselves.
Foreign companies that provide digital services like apps, high-frequency commerce, electronic data storage, online advertising and others are targets of the new law, the minister said.
Intended for foreign companies
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Zainab Ahmed, who said the Nigerian government will work with foreign companies like Amazon to see how they can remit taxes to the government, in accordance with section 4 of the finance law, which states that non-resident companies in Nigeria must now pay taxes at six percent on their sales.
In 2019, the Nigerian government considered the idea of taxing foreign companies not resident in Nigeria but providing digital services to Nigerians in accordance with the 2020 finance law.
Facebook announced in December that from January 2022, it would add 7.5 VAT to its fees for individuals seeking to pay for advertising on its platform.
What the experts say
Analysts are divided over the new policy. While others think it will attract more foreign direct investment (FDI) to Nigeria that could come and settle in order to benefit from waivers, others say it will scare some because they could shut down most of their platforms. -forms against Nigerians.
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FG, States on the VAT war
Legit.ng reports that the Governor of River State, Nyesom Wike, has cleared the air regarding the issue of the collection of value added tax (VAT) between the Federal Inland Revenue Service (FIRS) and certain states.
This Day reports that Wike has said his state is not at war with the federal government or any of its agencies.
The governor made this clarification following innuendo in some quarters about hostility between the two levels of government over the legal dispute over who is allowed to collect VAT in the state.