Google, Facebook, And Others Remit N3.85 Trillion In Taxes To The Federal Government—Report

Google, Facebook, And Others Remit N3.85 Trillion In Taxes To The Federal Government—Report

foreign companies operating in Nigeria, including Google, Netflix, and Facebook, paid N3.85 trillion in taxes to the Federal Government during…READ MORE…

the first nine months of 2024. This figure represents a significant increase of 68.12% compared to the N2.29 trillion collected in the same period of 2023.

The reported tax amount includes Company Income Tax (CIT) and Value Added Tax (VAT), as detailed by the National Bureau of Statistics on Tuesday. The data revealed a steady rise over the months, with tax collections growing by 26.21% from N1.03 trillion in the first quarter to N1.30 trillion in the third quarter, while N1.52 trillion was collected in the second quarter.

Further analysis indicated a marked improvement in tax remittances, with companies contributing N2.57 trillion in CIT from January to September 2024. This represents a 43.65% increase over the N1.79 trillion collected during the same period the previous year. Meanwhile, VAT collections reached N1.28 trillion, reflecting a substantial surge of 157.03%, up from N498.34 billion in 2023. This growth highlights enhanced tax collection efforts.

The Federal Inland Revenue Service (FIRS) explained that CIT is a 30% tax imposed on corporate profits, while VAT is a 7.5% consumption tax charged on goods and services paid by the final consumer.

On a quarterly basis, Nigeria’s CIT revenues rose by 42.49%, moving from N598.13 billion in Q1 to N1.12 trillion in Q2, before reaching N852.29 billion in Q3. VAT collection followed a different trend, with N435.73 billion collected in Q1, N395.74 billion in Q2, and N448.85 billion in Q3, indicating a modest increase of N13.12 billion or 3.01%.

In 2020, the Federal Government initiated plans to tax foreign digital service providers offering services and generating revenue in naira, given their popularity in the Nigerian market.

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Service providers such as video streaming sites, social media platforms, and firms offering digital content are expected to remit taxes to the FIRS. Companies like Netflix, Facebook, and Twitter have been operating in Nigeria without physical offices, providing digital video and advertising services to the local population. Others, including Alibaba and Amazon, earn revenue from Nigeria through data processing and digital platforms.

Tax revenues are anticipated to rise further as more social platforms begin fulfilling their tax obligations. Recently, the National Information Technology Development Agency noted that TikTok and X (formerly Twitter) have yet to comply with Nigeria’s tax filing regulations. In contrast, Google, LinkedIn, and Meta have adhered to their compliance requirements as outlined in the “Code of Practice for Interactive Computer Service Platforms and Internet Intermediaries (CoP for ICSP/II).”

Earlier this year, former Accountant-General of the Federation Oluwatoyin Madein remarked that tax revenue is currently the largest source of income for the nation. She noted the importance of tax figures to the federation account allocation committee, emphasizing how these revenues are crucial for distribution among the three tiers of government.

“It’s clear that tax revenues today represent the highest source of revenue for the federation. Thus, we eagerly await the monthly figures from the FIRS, as strong performance in this area benefits all levels of government,” she stated.

Additionally, the government has set a tax revenue target of N19.4 trillion for the FIRS for 2024, with over N18.5 trillion already remitted.

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