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Nigeria to prioritise taxes from digital non-resident firms in 2022

Yoopya with Reuters

Nigeria will prioritise tax collection from its digital economy in 2022 and focus on non-resident firms with significant economic presence that generate turnover in the West African country, the country’s tax chief said on Thursday.

Zainab Ahmed
Nigerian Finance Minister Zainab Ahmed attends the IMF and World Bank’s 2019 Annual Spring Meetings, in Washington, U.S. April 13, 2019. REUTERS/James Lawler Duggan//File Photo

Nigeria plans to tax digital non-resident companies that sell products to local customers at 6% of turnover, Finance Minister Zainab Ahmed said this month, as part of fiscal reforms to boost revenues and diversify the oil-dependent economy.

At around 4.5% of GDP, Nigeria has one of the lowest tax rates in the world, and has struggled to increase tax collection from its non-oil sector.

The government has said it wants to modernise taxes for its digital economy and to improve compliance.

We will implement the published guidelines … to collect VAT on digital supply of services and intangibles to Nigeria, Muhammad Nami, executive chairman of the Federal Inland Revenue Service (FIRS), said in a statement.

Digital services include apps, high frequency trading, electronic data storage and online advertising, the minister has said.

The World Bank said last year that Nigeria needed to boost non-oil taxes to at least 12.75% of gross domestic product to boost growth.

The FIRS has deployed a digital interface to facilitate implementation and also determine companies that generate relevant turnover from Nigeria, Nami said.

(Reporting by Camillus Eboh; Writing by Chijioke Ohuocha)

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Article from: reuters.com

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Nigeria to prioritise taxes from digital non-resident firms in 2022