Nigerians to pay taxes for using Facebook, twitter, Snapchat, others

Nigerians using any of twitter, Facebook, Google, Skype, Netflix and other companies will now pay tax for service rendered.

This was confirmed in a mail sent to customers by one of the affected companies, Skype, on Thursday.

The tax is directly to Nigerians who use the platform as a means to market, sell their products and also those who use subscription services.

With the new regulation, Nigerians will now pay a value added tax (VAT) at the applicable rate of 7.5 percent.

The new tax regime is in pursuant of the Companies Income Tax (Significant Economic Presence) Order, introduced in 2020 as an amendment of the Finance Act 2019.

The document imposes tax on any “foreign entity with respect to certain services or digital transactions tax foreign digital service providers offering services to Nigerians and earning revenue in naira.

The email to Skype customers seen by Ripples Nigeria reads:

“Due to recent changes to Nigerian tax requirements, from 1st July 2021, Skype is required to include a 7.5% Value Added Tax (VAT) on purchases of Skype paid products for Nigerian customers.

“How does this impact the allocation of Skype subscriptions?

“If you have a recurring billing subscription, including a Skype Number subscription, payments after 1st July 2021 will include the new VAT rate of 7.5%.

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“Example of how the price of product will change with a VAT rate of 7.5%:

1. Before 1st July 2021, a subscription costs USD 2.99 (no VAT is

charged).

2. After 1st July 2021, the same subscription will cost USD 3.21

(inclusive of applicable Nigerian VAT of 7.5%).

“If you do not agree with this change, you must cancel your subscription before 1st July 2021 by signing into your account.

“Does this impact the cost of Pay As You Go (PAYG) rates?

“Yes. From 1st July 2021, PAYG calling rates will include a VAT rate.

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