Nigeria is planning to deduct 5 per cent VAT for every online transaction via bank cards from 2020.
The burgeoning digital economy includes e-commerce where Jumia and Konga are playing. We also have the tech space with Flutterwave, Cowrywise, Piggybank and others.
Chairman of Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, confirmed this in a chat.
Fowler said the country was currently working on a solution for taxing the digital economy.
“We will address the issue of the digitalised economy very soon. There is no global solution to a digitalised economy.
“Different countries have taken different solutions to address the problem. Nigeria has not taken a position yet.
“But, we are meeting to see if we can come up with a global solution that we can all adapt to.”
The Nigerian government projected digital economy to generate $88 billion and create up to three million jobs in the next three years.
A former minister of Industry, Trade, and Investment, Dr. Okey Enelamah, during a US roadshow, last year, said the Nigerian government was resolute in creating an enabling environment where digital economy opportunities are not just theoretical but become real.
The FIRS boss said the tax agency would make use of Nigerian banks as an agent in achieving the 5% value-added tax.
Analyst says the digital economy may impact tax revenue in 2019
Head of Tax and Regulatory Services at PwC Nigeria, Taiwo Oyedele, in a blog post, had listed digital economy among major issues that will impact the tax system in 2019.
Oyedele, however, advised Nigeria’s fiscal authority to take measures to address this.