The Federal Government has disclosed intentions to place a tax on digital transactions in Nigeria, adding another level to the tax rank.
This was disclosed by the Secretary to the Government of the Federation (SGF), Boss Mustapha, in Abuja on Tuesday at the 17th General Assembly and 10th anniversary of the West Africa Tax Administration Forum (WATAF), with the theme, ‘The Taxation of the Digital Economy: Exploring Untapped Revenue Sources in Africa.’
The subject of priority at the event – convened by the Federal Inland Revenue Service (FIRS) – was the taxation of the digital economy, according to the News Agency of Nigeria (NAN).
Giving the directive to tax the digital economy was President Muhammadu Buhari, stated the SGF Mustapha, for follow-through on the flow of digital transactions for taxation purposes.
Mustapha said that the government, on the issue of the taxation of the digital economy, was mulling “what and how to collect”.
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He said, “Nigeria is putting in place measures to ensure that we keep up to date with these developments and answer the question of what to collect and how to collect it, as far as the digital economy is concerned.
“Therefore, our definition of what to collect- whether we call it income tax, Digital Service Tax or Value Added Tax, must address the issue of redefining who a taxable person or entity is, to accommodate the fact that digital transactions side-track the ordinary and traditional understanding of jurisdiction.”
Speaking at the event was the Chairman of FIRS, Mohammed Nami, who called on tax regulators to take advantage of the “opportunity” presented by advancements in science and technology.
He said, “When you speak of taxing the digital economy, you are talking about an economy without physical borders, trade and commerce that transcends our natural geographical delineations.
“In terms of tax administration, the only way that this can possibly be done with any accuracy and effectiveness is if it is done digitally, since the commercial activity itself is also done digitally.
“Tax regulators and other industry stakeholders must therefore rise up to the challenge of being in a position to tap into the stream of opportunity that advancements in science and technology afford us.”