Payment of online tax on products bought on the internet through eCommerce platforms and delivered to customers may start in January 2020, the Federal Inland Revenue Service (FIRS) has said.
FIRS chair, Babatunde Fowler, made the disclosure while addressing journalists on Thursday, on the sidelines of the Nigerian Tax Research Network third annual meeting held in Abuja.
He observed that a huge number of products bought online and delivered across Nigeria were not taxed.
Mr Fowler, while making justification for the new digital purchase tax reform, stated that:
“I am sure that when you order things online, you don’t even pay any VAT and this has two negative effects.
“The number one is that the shop owner who pays the rents, who has a staff, is at a disadvantage and if care is not taken, everybody will start ordering online and it will be delivered at their houses without any tax payment.
“We are going to try and address that by January of 2020.”
He went further to say that many things purchased online internationally were not taxed.
“On the international level, we have what we call significant presence and basically what happens now with digital products is that, I’ll use an example of software.
“You get software from any country outside Nigeria and when it comes to a time to update or to even repair (the software), it can be done remotely from the country of origin and you make payment without any tax,” Mr Fowler noted.
The FIRS chief affirmed that Nigerians would soon appreciate the significance tax for revenue generation. He refuted the claim made by the Auditor General of the Federation, Anthony Ayine, days ago, detailing the involvement of the FIRS and a couple of other Federal Government agencies in illegal deduction from the revenues generated by them.
“I don’t know where he (Ayine) got that information from, because all the revenue that we generate goes to the federation account. We collect our monthly revenue during FAAC.”