The Federal Inland Revenue Service will start taking Value Added Tax on online transactions any moment from now according to its chairman, Babatunde Fowler.
Mr Fowler mentioned this during an interview he had with the News Agency of Nigeria in New York on Saturday. He stated that banks would soon be mandated to charge VAT on all online transactions pertaining to the purchase of goods and services.
“Not that it is something new; it actually should be in existence. We will certainly follow up to make sure that every VAT that is due to be collected is collected.”
Mr Fowler said is among the measures being taken by the agency to achieve its N8 trillion 2019 revenue target.
FIRS targets tax defaulters: He further disclosed that the FIRS has started clamping down on businesses that failed to embrace the Federal Government’s tax amnesty programme. This action involves the closure of defaulters’ bank accounts and is expected to fetch the FIRS between N750 billion and N1 trillion.
We are going after everybody. I am sure you have heard that we have placed lien on some accounts of defaulters that have a billion Naira turnover annually. So certainly, we are not leaving anyone out of the tax net.”
About Tax Amnesty: It would be recalled that the tax amnesty programme was inaugurated in 2017 as the Voluntary Asset and Income Declaration Scheme. It gave tax defaulters a one-year grace period to declare and clear their unpaid taxes.
However, a number of taxpayers have protested that they are being wrongly targeted by FIRS. In response, Mr Fowler attributed flaws in the process to “administrative error” due to the large number of accounts that were involved.
“Well, there is certainly one or two instances where we made administrative error, but when you are looking at over 50,000 accounts, there is a tendency that sometimes an error might be made. For those that we made errors on, I wrote them personally apologising and of course we lifted the lien on their accounts.”
Tax is a compulsory levy to be paid no doubt, but this scheme I suggest should be managed with great caution to avoid hitting the already strained polity.
Nigerians must not pay their nose to survive, whatever is adopted should be within reach, else it will discourage online patronage in a country where people are struggling and are hardly convinced to make purchases online.
However hope this is not an avenue to augment the invisible national minimum wage.