From January 2020, Nigerians may start paying tax on every product purchased online and delivered to their respective homes, the Federal Inland Revenue Service, has indicated.
The service also denied claims made by the Office of the Auditor-General for the Federation that the service illegally deducted and failed to remit N210bn into the Federation Account.
Speaking on the sidelines of the third annual meeting of the Nigerian Tax Research Network in Abuja, the Executive Chairman, FIRS, Babatunde Fowler, told journalists that a lot of products purchased online and delivered to homes across the country were not taxed.
Providing an explanation on the taxation of digital purchases, Fowler said, “I am sure that when you order things online, you don’t often pay any VAT and this has two negative effects.”
“The number one is that the shop owner who pays rents, who has a staff, is at a disadvantage and if care is not taken, everybody will start ordering online and it will be delivered at their houses without any tax payment.”
“We are going to try and address that by January of 2020.”
The FIRS boss stated that on the international level, many products purchased online were not taxed.
He said, “On the international level, we have what we call significant presence and basically what happens now with digital products is that, I’ll use an example of software.”
“You get software from any country outside Nigeria and when it comes to a time to update or to even repair (the software), it can be done remotely from the country of origin and you make payment without any tax.”
Fowler added that Nigeria was getting to a stage where more of its citizens would understand the importance of tax in terms of revenue.
On claims of illegal revenue deductions by FIRS, he stated that the service would need explanation from the Auditor-General for the Federation, Anthony Ayine.
An OAGF report had stated that the FIRS generated N2.66tn but paid about N2.45tn into Federation Account, which implied that the service deducted and failed to remit N210bn.
Fowler said, “I don’t know where he (Ayine) got that information from, because all the revenue that we generate goes to the Federation Account. We collect our monthly revenue during FAAC.”
He insisted that the FIRS remitted all revenue it collected during the period to the Federation Account.