Vice President, Yemi Osinbajo, has disclosed that the country would be widening its tax net through utilising legal provisions that empower the Federal Government to collect taxes on profits made by global technology and digital firms not based in Nigeria but with a significant economic presence here.
He added that the move had become imperative following the country’s dire economic situation occasioned by outbreak of coronavirus globally and that it was important the country look inward by taxing tech company making billions from the country.
Osinbajo explained that since President Muhammadu Buhari-led administration was not considering raising tax rates to further burdened Nigerians facing adverse effects of Covid-19 induced economic hardship, thr government would think outside the box in widening the tax net.
The vice president made this known during the week while interacting with a delegation of the Chartered Institute of Taxation of Nigeria (CITN), led by its President, Adesina Adedayo who visited him at the Presidential Villa.
While noting that the apex government would not be raising tax rates at this time, based on the Finance Act 2019, Osinbajo said that it was already empowered to widen the tax net through the collection of taxes on the Nigerian income of global tech giants without an established office or permanent establishment and are currently not paying taxes in Nigeria.
According to Prof. Osinbajo, we have had severe economic downturns which of course implies that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected.
“I think the most important thing is that we must widen our tax net so that more people who are eligible to pay tax are paying. Several efforts have been made, and I am sure you are aware of the initiatives including the Voluntary Assets and Income Declaration Scheme (VAIDS) which was also an attempt to bring more people into the tax net, including those who have foreign assets.”
Continuing, the VP said: “we have also recently taken a step with respect to a lot of the technology companies that are not represented here but who do huge volumes of business here.
“The Finance Act has shown that we are very prepared to ensure that these big technology companies do not escape without paying their fair share of taxation in Nigeria. Many of them do incredible volumes here in Nigeria and in several other parts of the region.
“We have drawn up the regulations and we are prepared to go, and I think that we are at least in a good place to tap into some of the tax resources we can get from some of these companies.”