Osinbajo says the Federal Government will increase taxes on foreign technology companies doing business in Nigeria

As stated by Vice President Yemi Osinbajo, the Federal Government intends to broaden its tax base by collecting taxes from foreign technology companies that have operations in Nigeria, such as Facebook, Google, and a host of other companies.

The Vice President made the announcement during a meeting with the President of the Chartered Institute of Taxation of Nigeria (CITN), Mr Adesina Adedayo, at the Presidential Villa over the weekend.

What the Vice President said is important.
“While the Federal Government will not be raising tax rates at this time, the Finance Act 2019 provides it with the authority to broaden the tax net,” the statement continued.

“This includes collecting taxes on the Nigerian income of global technology giants with a significant economic presence in the country, even if they have not established a permanent office or permanent establishment in Nigeria and are not currently paying taxes in the country.

Accordingly, Section 4 of the Finance Act 2019 provides that the Finance Minister, upon the President’s order, may determine what constitutes a significant economic presence of a company other than a Nigerian company.”

“We have experienced severe economic downturns, which, of course, implies that we may not be able to collect taxes with the vigour that would be expected in normal circumstances.

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Osinbajo believes that “the most important thing is that we broaden our tax net so that more people who are eligible to pay tax do so,” he said.

The Vice President went on to say that many global internet companies generated enormous amounts of revenue in Nigeria, as well as in several other countries.
Adding, “We have drawn up the regulations and we are ready to go, and I believe that we are at the very least in a good position to tap into some of the tax resources that some of these companies can provide us with.”

What you should be aware of
Recall Early this month, Nairametrics reported that the Federal Government had hinted at the possibility of licensing the operations of social media and over-the-top (OTT) internet companies in Nigeria.
According to the Minister of Information and Culture, Lai Mohammed, “the Federal Government has also directed the National Broadcasting Commission (NBC) to immediately begin the process of licensing all over-the-top (OTT) and social media operations in Nigeria.”