The Federal Government has revealed plan to deduct 5% Value Added Tax (VAT) on every online transaction made via bank cards from 2020. Tunde Fowler, Chairman of Federal Inland Revenue Service (FIRS), confirmed this in an chat with the media.
Recall that the Government had earlier projected digital economy to generate $88 billion and create up to three million jobs in the next three years.
The VAT deduction is targeting major players in the country's emerging digital economy including e-commerce operators , Jumia, Jiji and Konga others. It is also targeting Flutterwave, Cowrywise , Piggybank , and others.
According to the FIRS boss, the country is currently working on a solution for taxing the digital economy.
He said, “ 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. 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," he said.
The FIRS boss however disclosed that the tax agency will make use of Nigerian banks as an agent in achieving the 5% value-added tax.
Dr. Okey Enelamah, former Minister of Industry' of Trade and Investment, at a US roadshow last year disclosed that the government is resolute in creating an enabling environment where digital economy opportunities are not just theoretical but become real.
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