Google, Facebook, others paid N2.55tn tax in six months

In the first half of 2024, Google, Netflix, Facebook, and other international businesses with operations in Nigeria paid N2.55 trillion in taxes to the Federal Government, according to Sunday PUNCH.

The sum is 158.76 percent more than the N985.27 billion that was collected in the 2023 period prior.

Value Added Tax and Company Income Tax are included in the figure, which was compiled using information from the National Bureau of Statistics.

The Federal Inland Revenue Service states that VAT is a consumption tax of 7.5% that is paid by the final consumer at the time services are delivered and items are purchased. CIT is a 30% tax levied on businesses’ profits.

Due to its widespread adoption by Nigerians, the Federal Government has stated plans to start collecting taxes in 2020 from international digital service companies that offer services and make money in naira.

A portion of these service providers—social media networks, websites that stream videos, and businesses that sell digital material downloads—are required to submit digital tax returns to the Federal Inland Revenue Service.

Nigerians can access digital video and advertising services from companies like Netflix, Facebook, and Twitter, among others, that have been operating in Nigeria without having a physical office.

Some, such as Amazon and Alibaba, make money from Nigeria through processing and sending user data that is gathered there, supplying goods and services directly or via a digital platform, or providing middle-man services that connect Nigerian suppliers and buyers.

Additionally, as stated in the 2021 Finance Act, the Federal Government of Nigeria announced in January 2022 that it would impose a six percent turnover tax on overseas enterprises that supply digital services to Nigerian domestic clients.

An analysis of the records revealed that between January and June 2024, the corporations paid N1.72 trillion in CIT and N831.47 billion in VAT.

Nigeria’s earnings from CIT climbed by 87.2 percent on a quarterly basis, from N598.13 billion in Q1 to N1.12 trillion in Q2.

According to checks our reporter conducted, this was the largest amount paid by the corporations and accounted for about 45.3% of the N2.4tn collected in the second quarter.

Nigeria earned N435.73 billion in Q1 and N395.74 billion in Q2, a decrease of N39.99 billion, according to a breakdown of VAT.

Without raising taxes, the Federal Government’s revenue for the first quarter of 2024 grew to N9.1 trillion, more than twice the amount recorded in 2023, according to information released on Tuesday by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.