A recent report reveals that prominent technology companies such as Google and Facebook, among others, have collectively remitted a substantial amount of N2.55 trillion in taxes over a six-month period.
In the first half of 2024, foreign companies such as Google,
Netflix, and Facebook contributed N2.55 trillion in taxes to the Federal
Government of Nigeria.
This amount marks a significant increase of 158.76 percent
compared to the N985.27 billion collected during the same period in 2023.
The total includes Company Income Tax (CIT) and Value Added
Tax (VAT), as reported by the National Bureau of Statistics.
The Federal Inland Revenue Service states that CIT is levied
at a rate of 30 percent on corporate profits, while VAT is a 7.5 percent
consumption tax applicable to goods and services, ultimately paid by the end
consumer.
In 2020, the Federal Government announced its intention to
start taxing foreign digital service providers that generate revenue in naira,
reflecting their popularity among Nigerian users.
These providers, which include video streaming services and
social media platforms, are expected to remit digital taxes to the Federal
Inland Revenue Service.
Companies like Netflix, Facebook, and X, which operate
without a physical presence in Nigeria, deliver digital video and advertising
services to the local market.
Additionally, firms such as Alibaba and Amazon earn revenue
in Nigeria by processing user data, providing goods or services directly, or
facilitating connections between suppliers and customers through digital
platforms.
Furthermore, in January 2022, the Federal Government
revealed plans to impose a six percent tax on the turnover of offshore
companies offering digital services to Nigerian customers, as outlined in the
2021 Finance Act.
The reports indicate that between January and June 2024,
these companies paid N1.72 trillion in CIT and N831.47 billion in VAT.
On a quarterly basis, Nigeria's CIT revenue rose by 87.2
percent, increasing from N598.13 billion in the first quarter to N1.12 trillion
in the second quarter.
Investigations conducted by our correspondent indicated that
the total amount represented the largest payment made by the companies,
accounting for over 45.3 percent of the N2.4 trillion collected in the second
quarter.
A detailed analysis of VAT showed that Nigeria generated
N435.73 billion in the first quarter and N395.74 billion in the second quarter,
reflecting a decline of N39.99 billion.
On Tuesday, Wale Edun, the Minister for Finance and
Coordinating Minister of the Economy, announced that the Federal Government's
revenue for the first quarter of 2024 rose to N9.1 trillion, more than doubling
the figure from 2023 without any tax increases.