NIGERIA – Vice President Yemi Osinbajo has disclosed that multinational digital companies operating abroad with significant economic presence in Nigeria will be subjected to taxation under the new Finance Act.
Osibanjo explained that previously the government only taxed companies with physical presence in the country but was now targeting even those without any physical presence in the country.
The vice president disclosed this while delivering a lecture titled, ‘Economic Dimension of National Security: The Nigerian Experience,’ at the National Defence College.
Osibanjo explained that under the new Act, all companies with significant economic presence in Nigeria were are liable to paying tax regardless of whether or not they had a physical presence.
He further noted that non-residents, who previously had no fixed address would now be taxed under the new Act.
He noted that adequate provisions were made under the Act to protect the Small and Medium Scale businesses in view of their roles in national development.
Osinbajo said the economic policies of the Federal Government were centred on creating a conducive environment for the private sector to thrive and support the creation of wealth, jobs and opportunities.
“Private sector is key to job creation and in doing so, the government has a responsibility to provide the needed infrastructure and enabling environment,” noted Osibanjo.
“Before the private sector is able to provide sufficiently for the majority of people, it is the responsibility of government to provide safety net for the extremely vulnerable and those who cannot work,” he added.
Nigeria projects revenue collection to be at N8.18 trillion in 2020, a figure that is 7% higher than the budgeted estimates for 2019.
To meet this very ambitious target, the government has come up with various strategies including raising VAT from 5 to 7.5% and expanding the tax pool to include digital companies without physical presence in Nigeria.