Starting next year, Nigerians may have to pay more than normally would whenever they pay for something online with their bank cards. And that’s because the country’s “tax collectors” are thinking about deducting a 5 percent VAT for every online transaction carried out via bank cards from next year.
Few people will like this but at least that’s the picture painted by Babatunde Fowler, Nigeria’s Federal Inland Revenue Service boss who is hoping to achieve this by getting the banks on board.
For all the remarkable progress made in Nigeria’s nascent digital economy in recent times, the industry has somehow managed to stay off the tax radar.
Names like Jumia, Flutterwave, Andela, and Cowrywise, just to mention a few, have pretty much given shape to the burgeoning digital space, and it appears the Nigerian government has figured the industry is ripe enough to pay its dues. And it sure looks like the authorities have come to collect.
The Chairman of the FIRS, confirmed this in an exclusive interview with Premium Times Newspaper in which he revealed that the country is currently working on a solution for taxing the digital economy.
“We will address the issue of the digitalised economy very soon. There is no global solution to a digitalised economy, Different countries have taken different solutions to address the problem,” said Fowler.
“Nigeria has not taken a position yet. But, we are meeting to see if we can come up with a global solution that we can all adapt to,” Premium Times quoted the FIRS Chairman as saying.
According to projections from the Nigerian government, the digital economy is well-positioned to generate USD 88 Bn and create up to three million jobs in the next three years.
During a US roadshow last year, Nigeria’s former Minister of Industry, Trade, and Investment, Dr. Okey Enelamah, suggested that the Nigerian government is keen on creating an enabling environment where digital economy opportunities are not just existing as mere words but evident in real actions. The tax move appears to be a step in that direction.
Featured Image Courtesy: guardian.ng