Digital Tax: Nigeria to commence taxation of digital transactions

The Federal Government of Nigeria has ordered the deployment and use of technology to tax all digital transactions carried out in the country in a bid to improve government revenue.

Boss Mustapha, the Secretary to the Government of the Federation (SGF), revealed this on Tuesday in Abuja at the 17th General Assembly and 10th anniversary of the West Africa Tax Administration Forum (WATAF), organized by the Federal Inland Revenue Service (FIRS), reports the News Agency of Nigeria.

According to him, the office of the Presidency has ordered the FIRS to ensure digital transactions were taxed digitally, in a bid to achieve seamless digital collection and remittance of tax revenue accrued from the digital economy to improve revenue collection and remittance as a matter of government policy

“Nigeria is putting in place measures to ensure that we keep up to date with these developments and answer the question of what to collect and how to collect it, as far as the digital economy is concerned.

“Therefore, our definition of what to collect- whether we call it Income Tax, Digital Service Tax or Value Added Tax, must address the issue of redefining who a taxable person or entity is, to accommodate the fact that digital transactions side-track the ordinary and traditional understanding of jurisdiction,” he said

Mr Mohammed Nami, Chairman of FIRS, citing the theme for 2021, “The Taxation of the Digital Economy: Exploring Untapped Revenue Sources in Africa”,  said the importance of the role of WATAF could not be overemphasized as it was set up by the founding fathers, to create the atmosphere for dialogue on collaborative efforts.

He said, “When you speak of taxing the digital economy, you are talking about an economy without physical borders, trade, and commerce that transcends our natural geographical delineations.

“In terms of tax administration, the only way that this can possibly be done with any accuracy and effectiveness is if it is done digitally since the commercial activity itself is also done digitally

“Tax regulators and other industry stakeholders must therefore rise up to the challenge of being in a position to tap into the stream of opportunity that advancements in science and technology afford us.