In compliance with the Finance Act 2022, Amazon, Facebook, and other non-resident foreign companies providing digital services to Nigerians, have now registered in the country for tax payment.
According to Mr Taiwo Okunade, a partner, Deloite & Touche, Lagos, who disclosed this Tuesday at a Tax Practice Management Workshop, organised by the Chartered Institute of Taxation of Nigeria (CITN) in Lagos, tax is the solution that government is using at the moment. to reduce its dependence on borrowing in order to bridge infrastructure deficit in the country. .
In his paper, Finance Act 2019: Amendments and Implementation Guides, which delved on the theme of the workshop: An Evolution of Finance Acts 2019 to 2021 and Practical Steps to Implementation by Practitioners, Okunade said “what the government is trying to do is to use the Finance Act to shift focus on the fiscal aspect of revenue generation”.
He added: “ What the Finance Act does is to help amend some legislations, not necessarily tax but they are very important in shaping the fiscal direction of the country.
“We have infrastructure deficit and the government is borrowing a lot to bridge the gap in the infrastructure deficit. And, in order to bridge that gap, and in order to reduce government’s dependence on borrowing, they keep the focus on tax.
“The main stay or main forex earners in Nigeria is oil. The only way to tap or generate revenue from other sectors of the economy is through taxation. Tax is the only solution that government is using at the moment.
“Amazon has registered in Nigeria, Facebook has also registered for taxation in Nigeria. We have all these companies that are providing market place, tools , platforms, apps in Nigeria that are now registered for tax in Nigeria.”.
Last January, Zainab Ahmed, the Minister of Finance, Budget and National Planning, announced that, beginning from January 2022, Nigerians who visit Amazon, Facebook and other e-commerce platforms not resident in Nigeria would have to pay VAT on items purchased online in a new law meant to drive more revenue for the Federal Government.
According to the minister, the new directive was contained in Section 30 of the Finance Act 2022 which amended the provisions of Sections 10, 31 and 14 on VAT responsibilities for companies not resident in Nigeria but provide digital services to Nigerians.
The minister stated that Section 30 of the Finance Act was created to amend sections 10, 31, 14 of VAT. “In regards to VAT obligations for non-resident digital companies and the tool that will be used is to limit VAT obligations to primarily to digital non-resident companies who supply Nigerians who cannot self-account for VAT.
Sunnews