Beginning January 1, 2022, Nigerians will be required to pay value added tax (VAT) for accessing Facebook.
According to TheNewsGuru.com (TNG), the tax is levied directly on Nigerians who utilize the site to market or sell their goods.
Facebook has already begun informing platform users of the development via email.
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Nigerians would now have to pay a 7.5 percent VAT as a result of the new development.
“Due to the installation of a value-added tax (VAT) in Nigeria, Facebook is forced to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for commercial or personal purposes,” the email to Facebook users states.
“Beginning January 1, 2022, all advertisers operating a business in Nigeria will be charged an additional 7.5 percent VAT on advertising services purchased.”
Your VAT ID will appear on your advertisements receipts if you’re registered for VAT and give it.
If you are a VAT registered firm in Nigeria and are entitled to recover VAT, this may assist you recover any VAT you paid to the Nigerian tax authorities.”
The Companies Income Tax (Significant Economic Presence) Order, which was introduced in 2020 as a modification to the Finance Act 2019, is the basis for the new tax regime, according to TNG.
The document levies a tax on any “foreign company with respect to specific services or digital transactions” that offers services to Nigerians and earns revenue in naira.
This is also reflected in the Finance Bill 2021, which received second reading in the National Assembly’s Red Chamber (NASS) on Wednesday.
Meanwhile, the federal government has been cracking down on social media services, particularly Twitter, in recent months.
The Nigerian government announced an indefinite ban of the microblogging platform’s operations in the country, citing acts that could jeopardize the country’s business existence. And the suspension hasn’t been removed yet.
Social media platforms such as Twitter, YouTube, LinkedIn, and Instagram, among others, will be incorporated into the CIT net starting next year.
The CIT network includes any international digital enterprises that transmit, emit, or receive signals, sounds, messages, photos, or data of any form, including e-commerce, app stores, and online advertisements.
Also in the coming year, the federal government plans to expand the Company Income Tax Act (CITA) to include a broad range of lottery and gaming-related firms.
“Betting, game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machines, and the like” are examples of such enterprises.
Those without Tax Identification Numbers (TINs) will also be barred from creating bank accounts under the Finance Bill 2021. Furthermore, account holders would no longer be able to use their accounts without supplying their TIN.