Value Added Tax (VAT) in Nigeria has been a topic of discussion among economic stakeholders, including e-Commerce operators since President Muhammadu Buhari signed the new 2022 budget and finance bill into law.
Amongst what was enshrined in the new finance Bill, non-resident companies (NRC) have been shouldered with the responsibility of collecting 7.5% VAT of every purchase they get from Nigerians.
This development, according to many e-Commerce operators, who spoke to BizWatch Nigeria on the matter, is inconsiderate to them considering the business model and value chain of the sector.
“We actually pay tax for almost every point we make in the value chain of our business, and it’s sad not only because the federal government is mandating us to pay 7.5% VAT, but also because they chose to ignore our challenges and compounded them further.
Think about this, I would pay 7.5% VAT in Nigeria for purchasing a product either on Amazon or other non-resident companies, and pay another 7.5% VAT to market it on Facebook or Instagram. How can my business not suffer for just this?” Seun Shotonwa, an e-Commerce operator, queried.
Shotonwa, who floated Buffy Buy, an e-Commerce company, in 2017, told our correspondent that “I’m sure that the purchase and selling sector was not in mind at the time the new finance law was considered.”
Like Shotonwa, another e-Commerce merchant, who identified herself as Grace Ekpo, stated that with the new law, while she’s obliged to pay income tax to the government, pay to bring her goods, pay to clear them with the Nigeria Customs Service (NCS), she’s now mandated to pay VAT to market them.
“There’s a whole lot that makes the newly-introduced VAT in Nigeria wrong. It’s not right, and it’s so crazy as everyone seems not to be bothered with the hardship it would bring on us,” Ekpo lamented further.
Also sharing his sentiment on the matter, a logistics operator, who doesn’t want his name mentioned in this report, encouraged the Nigerian government to review the finance bill and focus more on infrastructures than compounding the citizens’ problems.
His words: “We don’t even have a good house-numbering system in Nigeria, which to me, is just the least of many challenges we are facing in this country. The government should help us address these things, and I can assure you that we won’t worry about tax increments when all these are put in place.”
