Vice President Yemi Osinbajo says one of the efforts at widening Nigeria’s tax net is the taxation of global technology giants with Significant Economic Presence (SEP) in Nigeria.
He said this while receiving a delegation of the Chartered Institute of Taxation of Nigeria (CITN), led by its President, Mr Adesina Adedayo, at the Presidential Villa in Abuja.
This move, according to him, has been backed by regulations and some provisions in the Finance Act 2000.
Osinbajo said the severe economic downturn had made it necessary to create other ways of generating revenue without raising taxes.
He said, “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.
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“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.”
Quoting a recent Bloomberg news article, he said governments around the world are grappling with how to modernize their legal frameworks to account for the global reach of the digital economy, reshaping how policymakers think about issues as varied as monopoly power, taxation and workers’ rights.
Vice president said, “Also, international talks are currently ongoing in Paris on global standard rules for governments to receive taxes from such digital and technology firms with significant economic presence in foreign countries.
“In Nigeria, according to the Finance Act 2019, 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 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 significant economic presence in Nigeria”