Federal Government of Nigeria will tax the profits made by Google and Twitter, Vice President Prof. Yemi Osinbajo revealed.
Gatekeepers News reports that Osinbajo during an interaction with a delegation of the Chartered Institute of Taxation of Nigeria (CITN) led by Adesina Adedayo on Friday.
Even though the social media companies and technology firms are not established in Nigeria, Osinbajo said they possess a significant economic presence in the country.
He noted that the Federal Government will not be raising tax rates at this time, saying it will “balance all of these issues because clearly, higher tax rates can be a disincentive to businesses and investments.”
Osinbajo stated that they will utilise the legal provisions of the finance act of 2019 to receive taxes from the tech firms.
Gatekeepers News reports that section 4 of the finance act 2019, provides that “the Minister (Finance) may by order (of the President) determine what constitutes the significant economic presence of a company other than a Nigerian company”.
The finance act of 2019 provides that a company will pay taxes if it “transmits, emits or receives signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems, or any other electronic or wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high-frequency trading, electronic data storage, online adverts, participative network platform, online payments and so on, to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity.”
Osinbajo said: “We have had severe economic downturns which of course implies that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected.
“I think the most important thing is that we must widen our tax net so that more people who are eligible to pay tax are paying.
“We have also recently taken a step with respect to a lot of the technology companies that are not represented here but who do huge volumes of business here.
“The finance act has shown that we are very prepared to ensure that these big technology companies do not escape without paying their fair share of taxation in Nigeria. Many of them do incredible volumes here in Nigeria and in several other parts of the region.
“We have drawn up the regulations and we are prepared to go, and I think that we are at least in a good place to tap into some of the tax resources we can get from some of these companies.”
