Vice President Yemi Osinbajo has revealed that the Federal Government would begin to impose taxes on technology companies operating in Nigeria whether they’ve offices in the country or not.
Osinbajo made the disclosure during an interaction with a delegation of the Chartered Institute of Taxation of Nigeria led by its President, Adesina Adedayo, who visited him at the Presidential Villa on Friday.
The PUNCH reports that the vice president said that the decision has a legal backing provided by the Finance Act 2019.
He added that the companies would be taxed based on what they transmit, emits or receives signals, sounds, messages, images or data of any kind by cable, radio, app stores, online adverts, amongst others.
Osinbajo said, “We have had severe economic downturns which of course implies that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected.
“I think the most important thing is that we must widen our tax net so that more people who are eligible to pay tax are paying.
“Several efforts have been made, and I am sure you are aware of the initiatives including the Voluntary Assets and Income Declaration Scheme which was also an attempt to bring more people into the tax net, including those who have foreign assets.
“We have also recently taken a step with respect to a lot of the technology companies that are not represented here but who do huge volumes of business here.
“The Finance Act has shown that we are very prepared to ensure that these big technology companies do not escape without paying their fair share of taxation in Nigeria.
“Many of them do incredible volumes here in Nigeria and in several other parts of the region.
“We have drawn up the regulations and we are prepared to go, and I think that we are at least in a good place to tap into some of the tax resources we can get from some of these companies.”
According to Osinbajo, a company will pay taxes if it “transmits, emits or receives signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems, or any other electronic or wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high-frequency trading, electronic data storage, online adverts, participative network platform, online payments and so on, to the extent that the company has a significant economic presence in Nigeria and profit can be attributable to such activity.
“If the trade or business comprises the furnishing of technical, management, consultancy or professional services outside of Nigeria to a person resident in Nigeria to the extent that the company has a significant economic presence in Nigeria”.
