Key highlights
- Mailchimp will start charging Nigerian customers 7.5% VAT from April 20, 2023, in compliance with the Nigerian government’s policy.
- Nigerian customers using Mailchimp must update their account information and add a valid VAT ID to receive VAT invoices.
- The policy requiring foreign digital service providers to remit VAT to the Federal Inland Revenue Service was introduced by the Nigerian government in 2022.
Nigerians using Mailchimp will have to pay more from April 20th as the company implements 7.5% VAT.
This is in line with the Nigerian government’s policy mandating foreign digital service providers to remit VAT to the Federal Inland Revenue Service (FIRS).
Marketing automation platform, Mailchimp, has said it will start charging its Nigerian customers 7.5% Value Added Tax (VAT) from April 20, 2023. The company said the development is in compliance with the tax regulation in Nigeria which requires foreign digital-service providers, like Mailchimp, to charge and collect tax from their customers.
The company in a notice to its customers said this change will apply to all customers that have Nigeria as their account’s primary contact address. “The VAT that Mailchimp collects will be paid to the Nigerian tax authority,” the company stated.
Getting VAT invoice
To start getting VAT invoices for their records, Mailchimp said its Nigerian customers would have to update their accounts before April 20. According to the company, here is what to do:
- Log in to your Mailchimp account.
- Click your profile name/icon and choose Account & billing.
- Click the Billing drop-down menu and choose Billing information.
- Click Edit tax settings.
- In the pop-up modal, scroll down to the Tax ID section, and type in your valid VAT number in the field.
- Click Save.
- Continue to the next section to complete the process.
- After you’ve added your VAT ID
- Navigate to the Billing information page in your account.
- Scroll to the Notifications section and check the Label receipts as invoices box.
The back story
The Federal Government last year introduced a policy requiring foreign companies that provide digital services in the country to collect and remit Value Added Tax to the Federal Inland Revenue Service.
The Minister of Finance, Budget, and National Planning, Zainab Ahmed, who announced this during the public presentation of the 2022 budget in Abuja, said that the new policy is contained in Section 30 of the Finance Act which amended the provisions of Section 10, 31 and 14 on VAT obligations for non-resident digital companies.
- “Section 30 of the finance act designed to amend sections 10, 31, and 14 of VAT is in relation to VAT obligations for non-resident digital companies and the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria who can’t themselves self-account for VAT,” she said.