By Ibrahim Danlami
There are indications that Nigerians may pay more for digital services because the Federal Government has introduced a policy which requires foreign companies that provide digital services in the country to collect and remit Value Added Tax (VAT) to the Federal Inland Revenue Service.
Minister of Finance, Budget and National Planning, Zainab Ahmed, stated this during the public presentation of the 2022 budget on Wednesday in Abuja.
She said the new policy is contained in section 30 of the Finance Act which amended the provision of section 10, 31 and 14 on VAT obligations for non-resident digital companies.
According to the Minister, “Section 30 of the finance act designed to amend section 10, 31, and 14 of VAT is in relations to VAT obligations for non-resident digital companies and the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria who cannot themselves self-account for VAT.
“So if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for.
“I am using Amazon as an example. We are going to be working with Amazon to be agreed to be registered as a tax agent for the FIRS.
“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,” the Minister said.