Nigerians To Pay VAT For Any Digital Services – Finance Minister Says
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, aso Naija reports
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said this during the public presentation of the 2022 budget in Abuja on Wednesday.
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.