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Social Media Giants, Facebook, Twitter, Others to Start paying Tax in Nigeria
The Federal Government through the ministry of finance has commenced plans to ensure foreign-owned digital service providers that generate revenue from Nigeria through various services pay the right tax.
The Minister of Finance, Budget and National Planning Mrs Zainab Ahmed, who issued the Companies Income Tax (Significant Economic Presence), disclosed this during the weekend.
According to the Minister, these top global firms with a huge presence in Nigeria are now expected to pay digital tax to the Federal Inland Revenue Service.
The new policy will only affect foreign companies listed under the Significant Economic Presence (SEP) category. However, she said the ministry, may by order, determines what constituted SEP in Nigeria.
Some of the businesses to be affected are Facebook with over 33 million monthly users and about 16 million daily users, Google, Alibaba, Amazon, Netflix, Twitter, etc.
Analysts at PricewaterhouseCoopers said these affected companies will be mandated to register for income taxes in the country despite not having a physical presence in Nigeria.
The analysts further stated, “that Nigerian resident businesses (as well as the fixed bases of non-resident companies) that have transactions with the affected non-resident companies would also be required to account for withholding tax on some of the payments made to these foreign companies.”