Foreign digital service providers offering services to Nigerians and earning revenue in naira are expected to pay tax to the Federal government of Nigeria.
The tax is in line with an amendment of the Finance Act 2019 and the Companies Income Tax (Significant Economic Presence) Order, 2020 issued by the Minister of Finance, Zainab Ahmed.
The Economic order aimed to impose a tax on a foreign entity concerning certain services or digital transactions if it had a Significant Economic Presence in Nigeria.
Federal Government To Tax Netflix
The service providers which are video streaming sites, social media platforms and companies that offer downloads of digital contents are expected to pay digital tax to the Federal Inland Revenue Service.
The service providers include Netflix, Facebook, Twitter, Alibaba, Amazon and others who generate revenue from Nigeria by processing and transmitting data collected about users in Nigeria.
The new regulation would apply to companies with income of N25m or equivalent in other currencies from Nigeria in a year and those with a Nigerian domain name (.ng) or a website address in the country.
