FG will tax profits made by global tech giants with significant economic presence in the country — Osinbajo

Vice President Yemi Osinbajo has disclosed that the federal government will be taxing profits made locally by global technology and digital firms not based in Nigeria, but with significant economic presence in the country.

Osinbajo who made the announcement during an interactive session with delegates from the Chartered Institute of Taxation of Nigeria led by its President, Adesina Adedayo, at the Presidential Villa, said these global tech giants will be taxed even if they have not established an office or have a permanent establishment in the country. 

He also pointed out that Section 4 of the Finance Act 2019, provides that the finance minister, may by order of the president, determine what constitutes the significant economic presence of a company, other than a Nigerian company.

A statement released by his media aide, Laolu Akande read; 

 “While the Federal Government will not be raising tax rates at this time, based on the Finance Act 2019, it’s already empowered to widen the tax net.

“This includes collecting taxes on the Nigerian income of global tech giants with significant economic presence here, even if they have not established an office or permanent establishment, and are currently not paying taxes in Nigeria.

“In this regard, Section 4 of the Finance Act 2019, provides that the finance minister, may by order of the president, determine what constitutes the significant economic presence of a company, other than a Nigerian company.

“We’ve had severe economic downturns, which of course implies that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected.

“I think the most important thing is that we must widen our tax net so that more people who are eligible to pay tax are paying.

“I’m sure you are aware of the initiatives including the Voluntary Assets and Income Declaration Scheme (VAIDS), which was also an attempt to bring more people into the tax net, including those who have foreign assets.”

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