Tuesday , August 9 2022

Experts Urge Govt to Introduce New Tax System for Digital Enterprises

Thought leaders in taxation have advised African governments to introduce new tax systems that will allow them to generate more revenue from digital enterprises.

The experts gave this advice during a webinar hosted by the International Fiscal Association, Nigeria branch, which addressed the theme ‘Taxation of Digital and Space Mediated Enterprises’ on Wednesday.

They noted Nigeria and most African countries had not explored the revenue-generating opportunities from mining activities in the space.

A Tax Partner in Skadden, Arps, Slate, Meagher & Flom, Mr James Anderson, said there were laws governing the exploitation of space resources and did not restrict anyone or country.

He said the global space economy had been estimated to be worth £40bn by 2030.

Anderson said given the huge landmass in Africa, African countries, especially Nigeria, were in a great position to benefit from exploration of resources in the space.

According to him, African countries can join the developed nations in generating income by taxing profits from the revenue generated from cyberspace activities.

Anderson said this could be achieved through multilateral agreements between countries or bilateral treaty negotiations.

READ ALSO: Nigeria Mobile Subscriptions to Hit 246 Million in 2025 – Study

The discussion was moderated by Managing Partner and Head of the Tax Practice at ǼLEX, Mr Theophilus Emuwa; Principal, Ladimeji & Co, Mr Dapo Ladimeji; and Partner in the Tax Practice at Udo Udoma & Belo-Osagie, Ms. Lolade Ososami.

The Director at IBFD Knowledge Centre and Chair of the Centre for Studies in African Taxation, Ms. Belema Obuoforibo, noted that many countries had started developing unilateral measures to tax digital services.

According to her, this move became necessary because the countries have discovered that there is income in their jurisdiction that is untaxed even though the OECD plan to develop a legal and technical framework for taxation.

The OECD is aware that countries are not waiting for them but they have started putting in place unilateral measures,” Obuoforibo said.

A Partner at Quinones Cruz, Ms. Natalie Quinones, pointed out that there were new territories opening up in space and electromagnetic spectrum which African countries needed to explore.

About Bukola Olanrewaju

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