,
10 tweets,
2 min read
Read on Twitter
Read my take on the plan by FIRS to impose VAT on online transactions: leadership.ng/2019/05/19/sta…
However, reacting to the development, head of Tax and Corporate Advisory Services at PwC Nigeria, Taiwo Oyedele, said the Federal Internal Revenue Service does not have the capacity to tax online transactions, which are not already being taxed in the country.
Commenting on the statement by the head of the FIRS, that the service will commence imposition of Value Added Tax (VAT) on online transactions in the country, Oyedele, in a telephone interview with LEADERSHIP Sunday said, “I don’t know whether they needed to say it.
“The reality is that if you go online to make transactions on Jumia or any of these platforms, there is already VAT.
If you book a hotel online in Nigeria, there is already VAT on it, so the online businesses and transactions that are owned by entities in Nigeria, already pay the VAT. The FIRS does not have to impose the VAT on them, it is already being paid.
To book a flight online, you pay VAT. Now, where the difficulty is, is when you do the online service by a provider outside Nigeria, for example if you go on Amazon and you order a product, because Amazon is not a Nigerian company, then there is no Nigerian VAT.
So, the way that is done is that you pay them the full amount and they ship to you in Nigeria, by the time it gets to customs, if the amount is below the threshold where you don’t have to pay, you don’t pay anything.
The question is how the FIRS would be able to impose VAT. If you want to watch a movie on Netflix, you just go to Netflix to subscribe, you pay and then watch a movie.
The ones where they can impose, VAT are already being imposed. The ones where VAT is not currently being charged, the FIRS has no mechanism to be able to do that so it will be interesting to know exactly what they have in mind.
“It is not just about Nigeria, it is a global problem that is why we have the global committee on the digital economy and they are trying to fix it because it is not a problem that one country can solve. It is a problem that requires the whole world to come together.”
