Nigerians to Pay VAT for Using Amazon, Google and Other Digital Services
By Bashir Olanrewaju
Nigerians will pay value-added tax for online transactions while non-resident companies will be required to pay a 6 percent tax rate on the value of business generated in the country, Finance Minister Zainab Ahmed said.
International companies such as Amazon, Google, Facebook and Alibaba are now required to register as government tax agents for the purpose as required by section 30 of the 2021 Finance Act, Ahmed told reporters on Wednesday in Abuja.
“if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for,” she said. “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.”
This tax regulation will apply to all foreign companies that provide digital services in Nigeria whether in the form of “apps, high-frequency trading, electronic data storage or online advertising,” the minister explained.
Another provision of the law in section 4 requires non-resident companies engaged in e-commerce in the country “to pay tax at 6 per cent on their turnover,” Ahmed said.
President Muhammad’s Buhari’s government is seeking ways to expand its tax revenue in the face of dwindling revenue from crude oil, the country’s main export in the last five decades. The government’s desperation has grown as the country’s debt ballooned, forcing it to spend as much as 98 percent of current revenue to service already accrued debt over over 35 trillion naira.