Nigeria plans to tax non-resident digital businesses at 6% of revenue

ABUJA, Jan.5 (Reuters) – Nigeria plans to tax non-resident digital businesses that sell products to local customers up to 6% of revenue, Finance Minister Zainab Ahmed said on Wednesday as part of the tax reforms aimed at increasing incomes and diversifying 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 World Bank said last year that Nigeria could increase this proportion to around 7% over the next three years, assuming reforms in property tax, excise duties and personal income are undertaken. and that non-oil taxes must represent at least 12.75% of GDP.

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“This introduces a turnover tax on a fair and reasonable basis,” said Ahmed, referring to the value-added tax (VAT) obligation of non-resident digital businesses.

These digital services include apps, high-frequency commerce, electronic data storage and online advertising, Ahmed said in a televised 2022 budget speech last week.

Ahmed said the government wanted to modernize taxes for its digital economy and improve compliance.

She said non-resident digital businesses did not need to be registered locally, but would have an agreement with the Nigerian tax authority to collect and remit taxes, to reduce the burden of compliance.

Nigeria imposed additional excise taxes on cigarettes and alcoholic beverages and said last year it would consider introducing taxes on telecommunications airtime charges after increasing VAT to generate more money for the government.

Last year, the World Bank urged the country to publish the regulations necessary to implement the excise tax on telecommunications airtime charges.

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Reporting by Chijioke Ohuocha; edited by Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.


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