TECHDIGEST – The ambitious move by the Federal Inland Revenue Service (FIRS) to embrace the digitization of tax processes has continued to gather momentum after the Nigerian government reiterated its commitment to a digital economy.

A digitalized tax administration refers to using advanced platforms to enable real-time or near real-time collection and analysis of detailed taxpayer data.

According to experts, a digitalized tax administration process will block revenue leakages and revolutionize revenue generation for Nigeria.

It will also put a stop to illicit financial outflows from the country and enforce tax compliance among multinationals operating in the country.

TechEconomy gathered that Nigeria may have lost about $178 billion (about N5.4 trillion) to tax evasion by multinationals in ten years.

“Nigeria’s economy is fast digitalizing and digitalization of the Nigerian economy means that the ways and manners of organizing and doing businesses have changed,” Professor Yemi Osinbajo said on Thursday.

Professor Yemi who was represented by the Executive Chairman of the FIRS, Muhammad Nami, at the recent Chartered Institute of Taxation of Nigeria’s (CITN) 24th Annual Tax Conference, said the government will continue to heavily invest in the automation of tax administrative processes and digital infrastructure.

Professor Osinbajo noted that the theme for the tax conference, “Global Disruption, Taxation, and Digitalisation: Implication for Socio-Economic Development” aptly captures the prevailing realities within the national and global digitalization.

“Indeed, the radical changes brought about by digitalization have displaced the traditional approach to tax administration. Consequently, the digitalization of tax administration is unavoidable.

“He revealed the government has provided the enabling environment for a digitalized tax administration by making the necessary tax policy changes.

Additionally, he said, the government is also developing rules for taxation of the digital economy, enactment of required legislation, and providing necessary political backing for the team negotiating the new international tax rules for the digitalized economy.

However, the Vice President urged the institute to see its role in society as a pillar of the country’s socio-economic development.

“The possible impact of non-compliance by taxpayers—whom you hold briefs for—on the government’s revenue and the larger society is crucial and must be given topmost priority while holding briefs for them.

“In doing so, you must always bear in mind the pronouncement of the Court of Appeal in Phoenix Motors v. National Provident Fund Management Board (1993) that it is in the best interest of the society at large that government be in revenue.“

It is through this prism that I see your Institute as a pillar for the socio-economic development of Nigeria and the emancipation of the downtrodden of our society.

Without a doubt, your members will continue to discharge the solemn and sacred responsibility of ensuring that the interest of the larger society in Nigeria is not trodden upon; and this you must do with patriotic zeal,” he noted.

Source: Techeconomy.ng

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TECH DIGEST – Global technology companies such as Facebook, Google and others operating in Nigeria will soon be taxed by the Nigerian government as the Chartered Institute of Taxation of Nigeria (CITN) is already working on a strategic document in that regard.

This was disclosed when the President of CITN, Mr. Adesina Adedayo and his team paid a courtesy call to the Vice President of Nigeria, Prof. Yemi Osinbajo, in Abuja to present him the communiqué of the Institute’s 23rd annual tax conference in Kaduna recently.

“Arising from deliberations and a charge from his excellency, the Governor of Kaduna State, Mallam Nasir El-Rufai, CITN is working on a strategy document which would be concluded shortly towards finding a way and means to tax global technology companies,” Mr. Adebayo told the Vice President.

He noted that taxing the informal sector has become a salient issue in Nigeria, even as the government is finding a way to address its dwindling revenue through improved tax collection methods.

According to him, the Nigeria Economic Sustainability Plan as well as the measures implemented was a right response to the challenges posed by the Covid-19 pandemic and was largely instrumental to creating buffers for the government at all levels in withstanding the pressures and waves created during the peak period and the aftermath of COVID-19.

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TECH DIGEST – Vice President Yemi Osinbajo has disclosed that the Federal Government will soon impose heavy tax on giant technology and digital companies in Nigeria.

Osinbajo said the Federal Government will utilize its legal provisions to collect taxes on profits made in the country by global technology and digital firms not based in the country, but with significant economic presence.

He disclosed this during an interactive session with a delegation of the Chartered Institute of Taxation of Nigeria, CITN, led by its President, Mr Adesina Adedayo at the Presidential Villa on Friday and was contained in a statement by his spokesman, Laolu Akande.

Osinbajo, however, assured Nigerians that government would not be increasing tax any time soon.

The statement reads partly: “While the Federal Government will not be raising tax rates at this time, based on the Finance Act 2019, it is already empowered to widen the tax net, including by collecting taxes on the Nigerian income of global tech giants with significant economic presence here, even if they have not established an office or permanent establishment and are currently not paying taxes in Nigeria.

“In this regard, Section 4 of the Finance Act 2019, provides that “the Minister (Finance) may by order (of the President) determine what constitutes the significant economic presence of a company other than a Nigerian company.

“We have had severe economic downturns which of course implies that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected.

“I think the most important thing is that we must widen our tax net so that more people who are eligible to pay tax are paying. Several efforts have been made, and I am sure you are aware of the initiatives including the Voluntary Assets and Income Declaration Scheme (VAIDS) which was also an attempt to bring more people into the tax net, including those who have foreign assets.”

Platforms like Facebook, Twitter, Tiktok will be mostly affected by the new tax imposition when implemented.

These platforms are part of technological companies operating in Nigeria but are located abroad.

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