News & Events

AUG 2019 NEWS SUMBO AKINTOLA AND INA AROME

The Federal Inland Revenue Service (the “FIRS”) is currently working with the National Assembly to amend the Nigerian tax laws to adequately capture income earned by technology companies from Nigeria and transactions with Nigerian residents. The Chairman of the FIRS, Babatunde Fowler, reiterated at the “FIRS Stakeholders Retreat on the Taxation of the Digital Economy”, that the Nigerian economy misses out on the collection of Value Added Tax (“VAT”) for purchases of goods and services. He stated the intention of the FIRS to use banks as collecting agents for VAT on online transactions, for purchase of goods and services done by Nigerian residents from multinational tech giants.

While the collection of VAT will not impose any tax obligation on the tech companies, the proposed amendments (which have not been shared publicly)  is likely to result in tech companies such as Apple, Facebook, eBay etc. being liable to pay tax to the FIRS for services provided by them into Nigeria, irrespective of their non-resident status.