Vice President Yemi Osinbajo, has on Sunday, revealed that the President Muhammadu Buhari Federal Government has concluded plans to compel all foreign social media platforms operating in Nigeria, to pay heavy taxes on profits made from operating in the country,
The Vice President, according to a statement signed by his Senior Special Assistant on Media and Publicity, Laolu Akande, said this during an interactive session with a Delegation of the Chartered Institute of Taxation of Nigeria, CITN, at his office, in Abuja.The statement reads: “While social media and technology businesses are not founded in Nigeria, they have a substantial economic footprint in the nation. 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.“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.“We have had severe economic downturns which of course, imply 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.“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.“The Finance Act 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.
“While the Federal Government has no plans to raise taxes now, Nigeria’s tax rates are too low when compared to other countries.“So we have had to balance all of these issues because clearly, higher tax rates can be a disincentive to businesses and investments. In terms of domestic resource mobilization, we are trying to do the best we can given the present circumstances and I believe that there is room for improvement.”