7 Things You should know about Taxation of Online Transactions by FIRS
The Executive Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, in a recent interview, gave seven insights in a bid to clarify most of the issues bothering on taxation of online transactions in Nigeria.
BRANDPOWER presents the seven notifications made by the FIRS boss as revealed on the commission’s official Twitter page.
Firstly, the FIRS chief noted that VAT is payable on all listed items/services whether the transaction is online or offline as stated in the VAT Act.
Secondly, he said payment of 5% VAT on online transactions is not an announcement of a new tax type.
Thirdly, Mr. Fowler stated that the FIRS Act empowers the commission to appoint banks, other financial institutions, MDAs and other taxpayers as VAT COLLECTING AGENTS.
Fourthly, he noted that online transactions that are ‘VATable’, that is, liable to be charged with VAT, whether online or offline, will be subjected to payment of VAT.
Fifthly, he said all companies doing business online and remitting VAT will not pay double tax. He added that it is only online businesses that do not pay VAT will henceforth pay it on all ‘VATable’ items.
Also, he stated that VAT will not be charged on ‘Non-VATable’ goods such as all medical and pharmaceutical products, basic food items, books and educational materials, baby products, all exports, locally produced agricultural products and veterinary medicine items.
Lastly, the FIRS boss, who wants taxation to be fair to all, said those not in the tax net (online or offline) should be brought in so that no one will be left out in the due payment of tax.