Online purchase tax may commence next month —FIRS

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.”

Read also: Electricity tariffs to rise as Nigerian govt launches new power policy

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.”

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now