The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that the proposed amendment to the Finance Law will ensure that Amazon and other digital companies become Value added tax collectors for him Federal Internal Revenue Service (FIRS).
Ahmed said the bill, which came from the executive arm of the government, if approved by lawmakers and approved by President Muhammadu Buhari, will reduce ambiguity and restrict VAT obligations to non-resident digital companies.
The minister spoke in Abuja on Monday at the public hearing on the bill.
The hearing was organized by the House Finance Committee.
Buhari had transmitted the bill to both houses of the National Assembly last week on Tuesday.
The bill seeks to amend the Capital Gains Tax Law, the Corporate Income Tax, the FIRS Establishment Law, the Personal Income Tax, the Stamp Tax Law and the Tertiary Education Law, the Value Added Tax, the Insurance Police Trust Fund and the Fiscal Responsibility Law.
The bill proposes an amendment to section 10 of VAT, by introducing a new section 10, placing the burden of VAT on non-resident digital companies, rather than non-resident individuals.
Explaining the implications of the proposed amendment, he said, “for example, what is being proposed here is that Amazon can now register as a VAT collection agent for FIRS, adding VAT to your transaction and submitting it to FIRS.”
He also added that the bill seeks to “restrict the VAT obligation to Non-Resident Digital Companies (which supply people who cannot self-account VAT).
“FIRS can designate individuals for tax collection purposes, including non-residents. These designated individuals collect and remit the taxes collected, ”he said.
On the taxation of e-commerce companies, Ahmed said the bill seeks to introduce a turnover tax on the fair percentage of profits made by providing digital services to Nigerian customers. Such digital services include applications, high-frequency commerce, and electronic data storage.
Additionally, the bill seeks to amend the FIRS establishment law to protect taxpayer data. “Any person in an official duty or employed by the administration of this law or otherwise, who has access to taxpayer information, will consider and treat such information as secret and confidential.”
The minister also hinted that some of the reforms may come with additional taxes and that past fiscal measures have yielded some results.
Opening the hearing, House Speaker Femi Gbajabiamila, who was represented by Ndudi Elumelu, the minority leader, said the bill will block waste and loopholes in the system.
He added that the Chamber will focus on scrutinizing all loan applications by the executive.
“We must strengthen the institution to strategically control reckless loans by ensuring accountability in the use of borrowed funds and ensuring that loans are on favorable terms or with relatively low interest rates and subject to the rigors of legislation,” he said. .
Twitter ban
On June 4, the federal government announced the indefinite suspension of the microblogging site Twitter, following the removal of a tweet from Mr. Buhari.
During the Independent Day broadcast on October 1, Buhari announced the conditions for lifting the ban on Twitter.
The conditions, the president said, were “National Security and Cohesion; Registration, physical presence and representation; Fair taxation; Conflict resolution; and local content “.