By Our Reporter
Nigeria earned N2.55trillion in taxes in the first six months of 2024 from Google, Netflix, Facebook and other foreign companies operating in the country.
The amount represents an increase of 158.76 per cent from N985.27billion collected in the preceding period of 2023.
The figure includes Company Income Tax (CIT) and Value Added Tax (VAT), data compiled by the National Bureau of Statistics (NBS) shows.
CIT is a 30 per cent tax imposed on companies’ profit, while VAT is a 7.5 per cent consumption tax paid when goods are purchased, and services are rendered and borne by the final consumer.
In 2020, the Federal Government had announced plans to begin tax collection 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 (FIRS).
Netflix, Facebook, 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.
Also, in January 2022, the Federal Government disclosed that it would charge offshore companies providing digital services to local customers in Nigeria a six per cent tax on turnover as provided in the 2021 Finance Act.
A breakdown of the reports showed that the companies paid N1.72trillion as CIT while N831.47billion was collected as VAT between January and June 2024.
On a quarterly basis, Nigeria’s earnings from CIT increased by 87.2 per cent from N598.13billion in Q1 to N1.12trillion in Q2.
Checks also revealed that the amount was the highest sum paid by the companies, contributing more than 45.3 per cent to the N2.4trillion collected in the second quarter.
A breakdown of VAT showed that Nigeria earned N435.73billion in Q1 and N395.74billion in Q2, marking a reduction of N39.99billion.
The Minister for Finance and Coordinating Minister of the Economy, Wale Edun, recently revealed that the Federal Government’s revenue for the first quarter of 2024 increased to N9.1trillion, more than doubling the amount recorded in 2023 without increasing taxes.