Google, Facebook, Other Foreign Companies Paid ₦‎3.8tn Tax To FG – Report

Google, Netflix, Facebook, and other foreign companies operating in Nigeria paid N3.85tn in taxes to the Federal Government in the first nine months of 2024, The PUNCH reports.

The amount represents an increase of 68.12 per cent from N2.29tn collected in the preceding period of 2023.

The figure includes the amount paid as Company Income Tax and Value Added Tax. This data was obtained from the National Bureau of Statistics on Tuesday.

The report showed that the amount increased by 26.21 per cent from N1.03tn collected in the first quarter to N1.30tn in the third quarter. N1.52tn was remitted in the second quarter.

An in-depth analysis of the reports revealed a significant improvement in tax remittance, with companies contributing N2.57tn in CIT for the period from January to September 2024. This marked a remarkable increase of 43.65 per cent compared to the N1.789tn collected during the same period in the previous year.

Additionally, VAT collections for the same period reached N1.28tn, reflecting an impressive surge of 157.03 per cent, up from N498.34bn in 2023. This data underscores a substantial growth in tax revenue, fuelled by improved collection drive.

According to the Federal Inland Revenue Service, CIT is a 30 per cent tax imposed on companies’ profit, and VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services are rendered and borne by the final consumer.

On a quarterly basis, Nigeria’s earnings from CIT increased by 42.49 per cent from N598.13bn in Q1 to N1.12tn in Q2 and N852.29bn in Q3.

VAT collection showed that Nigeria earned N435.73bn in Q1, N395.74 in Q2, and N448.85bn, marking an increase of N13.12bn or 3.01 per cent.

In 2020, the Federal Government began plans to collect tax from foreign digital service providers offering services and earning revenue in naira due to its high acceptance by the Nigerian populace.

Some of these service providers, which are video streaming sites, social media platforms, and companies that offer downloads of digital content, are expected to pay digital tax to the Federal Inland Revenue Service.

Netflix, Facebook, and Twitter, among others, which have been operating without a physical office in Nigeria, offer digital video and advertising services to Nigerians.

Others, like Alibaba and Amazon, generate revenue from Nigeria by processing and transmitting data collected about users in Nigeria, providing goods or services directly or through a digital platform, or offering intermediate services that link suppliers and customers in Nigeria.

These earnings are, however, expected to further increase when other social platforms start remitting their statutory obligation to the government.

Last week, the National Information Technology Development Agency indicated that TikTok and X (formerly Twitter) are yet to comply with tax filing requirements by Nigeria’s regulatory framework.

However, Google, LinkedIn, and Meta have met their tax compliance obligations as outlined in Part III, Sections 3–1, and Part II, Section 10 of the “Code of Practice for Interactive Computer Service Platforms and Internet Intermediaries (CoP for ICSP/II).”

Earlier this year, the former Accountant-General of the Federation, Oluwatoyin Madein, revealed that tax revenue is currently the nation’s highest source of income.

Madein said due to the substantial revenue generated from taxes, members of the federation account allocation committee eagerly anticipate the monthly figures from the Federal Inland Revenue Service, as these funds are crucial for distribution among the three tiers of government.

“Tax revenues today are the highest source of revenue accruing to the federation. Therefore, at the federation account allocation committee meetings, we eagerly await the numbers coming from the FIRS because the performance keeps on increasing and brings succour to all tiers of government,” she said.

Recall that the government gave the FIRS a tax revenue target of N19.4tn for 2024, remitting over ₦18.5tn.

Source:- Punchng