THE Nigerian government has unveiled plans to widen the nation’s tax net by collecting tax on profits made by global technology and digital firms that operate in the country.
In line with the plan, global digital companies that are not based in Nigeria but have a significant local economic presence in the country would be made to pay taxes to the government.
Vice President Yemi Osinbajo revealed the plan during a meeting with a delegation of the Chartered Institute of Taxation of Nigeria (CITN) led by its President Adesina Adedayo.
The Nigerian government would collect tax from the digital platforms by invoking the provisions of existing laws, according to Osinbajo.
A statement released by the Senior Special Assistant to the Vice President on Media and Publicity Laolu Akande disclosed that Osinbajo said the decision to tax the digital firms was part of the government’s plan to widen the nation’s tax net.
Noting that the government would not be raising tax rates at the moment, the vice president stressed that the country would make use of the Finance Act 2019 to ensure that the concerned digital companies did not escape from paying tax in Nigeria.
“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.
“Several efforts have been made, and I am sure you are aware of the initiatives including the Voluntary Assets and Income Declaration Scheme which was also an attempt to bring more people into the tax net, including those who have foreign assets.
“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,” the vice president said
Osinbajo added that the Nigerian government had, over the past few years, initiated programmes aimed at improving the growth of small businesses, including the formalisation of many artisanal enterprises.
In his remarks, the President of CITN Adesina Adedayo commended the vice president for his role in the implementation of key government interventions in the economic sector.