FIRS says online purchase tax may begin January – TheNigerialawyer

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.