The federal government has proposed the collection of companies income tax (CIT) from profits made by foreign digital companies with “significant presence” in the country.
The bill is for tax collection in 2022.
The bill amends Capital Gains Tax Act; Companies Income Tax Act; Federal Inland Revenue (Establishment) Act; Personal Income Tax Act; Stamp Duties Act; Tertiary Education Trust Fund (Establishment) Act; Value Added Tax Act; Insurance Act; Nigerian Police Trust Fund (Establishment) Act; National Agency for Science and Engineering Infrastructure Act; Finance Control and Management Act; and Fiscal Responsibility Act; and for Related Matters, 2021.
Last week, President Muhammadu Buhari President Muhammadu Buhari transmitted the bill to the National Assembly, advising that it will aid tax and levy collections in the 2022 fiscal year.
If passed into law, TheCable understands that the FIRS will assess and charge on the turnover of the digital companies transmitting or operating in the country. These companies include Twitter, Alibaba’s AliExpress, Facebook (Meta), Google, and others.
Over the years, the federal government has been looking for possible ways to tap and incorporate the digital economy into the tax net.
It added that such assessment and charge would be a fair and reasonable percentage of the turnover attributable to that presence.
The bill further listed those businesses as electronic commerce, application store, high-frequency trading, electronic data storage, online adverts, participative network platform, online payments, and so on.
– The Cable