Monday , September 26 2022
Digital Economy: FIRS to Prioritise Taxes From Digital Non-Resident Firms in 2022

Digital Economy: FIRS to Prioritise Taxes From Digital Non-Resident Firms in 2022

The Federal Inland Revenue Service (FIRS) said it would give priority to the taxation of the digital economy this year. It added that it would deploy technological tools in assessing entities that fall within the Significant Economic Presence (SEP) threshold and relevant turnover generated from Nigeria.

Recall, it was reported that Nigeria plans to tax digital non-resident companies that sell products to local customers at 6% of turnover, Finance Minister Zainab Ahmed said this month, as part of fiscal reforms to boost revenues and diversify the oil-dependent economy.

At around 4.5% of GDP, Nigeria has one of the lowest tax rates in the world, and has struggled to increase tax collection from its non-oil sector.

The government has said it wants to modernise taxes for its digital economy and to improve compliance.

“We will implement the published guidelines … to collect VAT on digital supply of services and intangibles to Nigeria,” Muhammad Nami, executive chairman of the Federal Inland Revenue Service (FIRS), said in a statement.

Digital services include apps, high frequency trading, electronic data storage and online advertising, the minister has said.

The World Bank said last year that Nigeria needed to boost non-oil taxes to at least 12.75% of gross domestic product to boost growth.

The FIRS has deployed a digital interface to facilitate implementation and also determine companies that generate relevant turnover from Nigeria, Nami said.

Click Here To Read: How Road Infrastructure Tax will Help Bridge Nigeria’s Revenue Gap – FIRS Chairman

While speaking as a special guest at the Pedabo 2022 Annual Public-Private Sector Engagement, Nami said that the target of FIRS is to achieve 100 per cent automation of all its tax administration processes this year to block revenue leakages.

Nami noted that by the amendment to Section 25 of the FIRS (Establishment) Act of the 2021 Finance Act, any person who fails to grant the service access to its information technology systems to connect to its automated tax administration solution is liable to penalties.

The FIRS boss in a statement signed by his Special Assistant, Media and Communication, Johannes Wojuola, stated that the Service “will focus on compliance and enforcement strategies in 2022, by leveraging on intelligence, strategic data mining and analysis, to enhance audit and investigation functions and implementing the penalty regimes following the laws.”

Nami called on taxpayers, consultants, collection agents and other stakeholders in the tax system to partner the FIRS to make taxation and tax revenue collection a pivot of economic growth and national development.

 

About Bukola Olanrewaju

Check Also

FrieslandCampinaWamco’s Manufacturing Executive Wins Manufacturer Executive of the Year Award

FrieslandCampinaWamco’s Manufacturing Executive Wins Manufacturer Executive of the Year Award

The Manufacturing Director at FrieslandCampina, Mr Adekola Lamidi, recently bagged the Manufacturer Executive of the …

Leave a Reply

Your email address will not be published.