EXPERTS HOT NEWS NIGERIA Nigeria Introduce digital Tax 6 months ago Adeleye Awakan Post Views: 388 Nigerians may have to pay more for digital services as 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. Undoubtedly this move by the Nigerian government will, of course, see online sports betting operators pay more to run online digital marketing campaigns ads on social media and other digital platforms in the country. However, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, disclosed this during the public presentation of the 2022 budget in Abuja late last year. She said that the new policy is contained in Section 30 of the Finance Act, which amended Section 10, 31, and 14 on VAT obligations for non-resident digital companies. The Minister said, “Section 30 of the finance act designed to amend section 10, 31 and 14 of VAT is related to VAT obligations for non-resident digital companies, and the mechanism they will use is to restrict VAT obligations“. Mainly to digital non-resident companies who supply individuals in Nigeria who can’t self-account for VAT. “So if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying. I am using Amazon as an example. We will be working with Amazon to be agreed to be registered as a tax agent for the FIRS.” – say minister Zainab. 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 percent on their turnover. Meanwhile, the Federal Government had in 2019 disclosed plans to tax foreign digital service providers offering services to Nigerians according to amended provisions in the 2020 Finance Act. This is the first time the government is setting a specific tax rate. Ahmed said: “Section 4 of the ACT, which is the taxation of e-commerce businesses owned by non-resident companies on a fair and reasonable turnover basis, has been set at 6 percent. This 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.” In addition, the move was aimed at modernizing the taxation of Information Technology and the digital economy in line with current realities, adding that this conforms with the provisions of the National Development Plan 2021 – 2025. Earlier in December 2021, Facebook, in a statement, disclosed that it will, from January 1, 2022, begin to charge VAT on the sale of advertisements to influencers. Regardless of whether they’re buying ads for business or personal purposes. Facebook is one of the country’s most popular social media platforms. It is one of the most commonplace bookmakers; use to for online digital marketing for customer acquisition and operators use other social media platforms for run online sports betting business. Although the Nigerian Lottery Regulatory Commission (NLRC) has also recently informed the gaming, lottery, and betting operators about implementing the CMS tech. This system is called the Central Monitoring System (CMS) that will monitor the activities of operators in compliance to meet the regulator’s tax in terms of accurate revenue generation through taxation in the lottery, betting and casino ecosystem. About Post Author Adeleye Awakan Author E-play Africa, sports betting reviews, thoughtful leardership articles in Africa gambling industry, marketing gaming platforms in Africa with strong networking relationship with gaming operators in Africa, Expertise in PR, marketing communication, and consultant on gaming in Africa. See author's posts Adeleye AwakanAuthor E-play Africa, sports betting reviews, thoughtful leardership articles in Africa gambling industry, marketing gaming platforms in Africa with strong networking relationship with gaming operators in Africa, Expertise in PR, marketing communication, and consultant on gaming in Africa. 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