ABUJA (Reuters) – Nigeria will prioritise tax assortment from its digital financial system in 2022 and concentrate on non-resident firms with important financial presence that generate turnover in the West African nation, the nation’s tax chief mentioned on Thursday.
Nigeria plans to tax digital non-resident corporations that promote merchandise to native prospects at 6% of turnover, Finance Minister Zainab Ahmed mentioned this month, as a part of fiscal reforms to enhance revenues and diversify the oil-dependent financial system.
At round 4.5% of GDP, Nigeria has one of many lowest tax charges in the world, and has struggled to improve tax assortment from its non-oil sector.
The authorities has mentioned it needs to modernise taxes for its digital financial system and to enhance compliance.
“We will implement the printed pointers … to accumulate VAT on digital provide of providers and intangibles to Nigeria,” Muhammad Nami, govt chairman of the Federal Inland Revenue Service (FIRS), mentioned in a press release.
Digital providers embody apps, excessive frequency buying and selling, digital information storage and internet advertising, the minister has mentioned.
The World Bank mentioned final 12 months that Nigeria wanted to enhance non-oil taxes to at the very least 12.75% of gross home product to enhance development.
The FIRS has deployed a digital interface to facilitate implementation and in addition decide corporations that generate related turnover from Nigeria, Nami mentioned.
(Reporting by Camillus Eboh; Writing by Chijioke Ohuocha)