Aug 062019

Nigeria to charge 5% on every online purchase you make with your bank cards from next year

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FIRS Chairman, Babatunde Fowler
Babatunde Fowler, the FIRS boss says Nigerian banks will be used as an agent in achieving the 5% value-added tax.
Analyst says the digital economy may impact tax revenue in 2019
Nigeria’s multi-billion dollar burgeoning digital economy is still out of tax net

Nigeria is planning to deduct 5% VAT for every online transaction via bank cards from next year.

The burgeoning digital economy includes e-commerce where Jumia and Konga are playing. We also have the tech space with Flutterwave, Cowrywise, Piggybank, and others.

Tunde Fowler, Chairman of Federal Inland Revenue Service (FIRS), confirmed this in an exclusive interview with Premium Times Newspaper.

Fowler said the country is currently working on a solution for taxing the digital economy.

“We will address the issue of the digitalised economy very soon. There is no global solution to a digitalised economy.

“Different countries have taken different solutions to address the problem. Nigeria has not taken a position yet. But, we are meeting to see if we can come up with a global solution that we can all adapt to,” Premium Times quoted the FIRS Chairman as saying.
From left: Managing Director, Nigerian Export-Import Bank ( NEXIM), Abubakar Bello; Executive Chairman, Federal Inland Revenue Service, Dr Babatunde Fowler; Managing Director, Bank of Industry, Mr Olukayode Pitan and Vice President Yemi Osinbajo, during First Quarter Meeting of Micro, Small and Medium Enterprises Development ( MSME) stakeholders at the Presidential Villa in Abuja on Monday (6/05/19). [NAN]

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Nigeria’s multi-billion dollar burgeoning digital economy

Nigerian government projected digital economy to generate $88 billion and create up to three million jobs in the next three years. The former minister of Industry, Trade, and Investment, Dr. Okey Enelamah, during a US roadshow last year said the Nigerian government is resolute in creating an enabling environment where digital economy opportunities are not just theoretical but become real.

How FIRS plans to tax the digital economy

The FIRS boss said the tax agency will make use of Nigerian banks as an agent in achieving the 5% value-added tax.
A PwC’s office used to illustrate the story

Analyst says the digital economy may impact tax revenue in 2019

Taiwo Oyedele, Head of Tax and Regulatory Services at PwC Nigeria, in a blog post, had listed digital economy among major issues that will impact the tax system in 2019.

Oyedele, however, advised Nigeria’s fiscal authority to take measures to address this.

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