The Federal Inland Revenue Service (“FIRS”) is seeking the support of the Central Bank of Nigeria to track the payment of Value Added Tax (“VAT”) made electronically by foreign entities that are not registered in Nigeria.
The FIRS said this in a document detailing its strategic revenue growth initiatives for 2019 to 2021 which was submitted to the National Assembly. The strategic revenue growth initiatives are measures aimed at boosting revenue through taxation, particularly VAT. In recent times there has been an increase in online purchases of goods and services from foreign entities that are not registered in Nigeria. These transactions are subject to VAT payment under the current VAT legislation. However, since the payment of VAT on these transactions should be and is made electronically, huge tax revenues are lost due to the inability of the FIRS to track and VAT on these transactions. In addition, the FIRS is seeking a change in the meaning of “services” in the Value Added Tax Act, such that it is expanded to include intangibles and digital items such as software.
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