Ministry of Finance Archives

Tech Weekly RoundUp, coronavirus, Week 8, wole

Tech Roundup S02E23

On Tech RoundUp this week, we review the news that the Nigeria Ministry of Finance is planning to introduce taxes for foreign digital services paid for...

NDDC, Cash transfer, President Buhari, non-oil Exports, oil revenue, export revenue, FG Waives import duties for medical supplies, Orders Customs to expedite clearing, Presidency faults report on Kyari as Buhari didn’t cancel memos, appointments approved by him

Business News5 months ago

COVID-19: President Buhari sets up committee to look at impact on 2020 budget

President Muhammadu Buhari has set up a committee to assess its impact on Nigeria’s 2020 budget

FG foreign reserves Nigeria Yemi-Osinbajo, FG negotiates with Governors on bail-out fund, as NEC approves 100 billion for NLTP, bail-out fund States Governors, FG earns N28.6 trillion from VAT, others , Ease of doing Business: States must partner with Federal Government – Osinbajo , AfCFTA: Nigeria’s financial footprints to be extended across Africa – Osinbajo , FG seeks partnership with National Council of Registered Insurance Brokers, here’s why , Osinbajo says FG’s investment to take advantage of Africa’s $200bn tourism potential is massive, Pres. Buhari’s plan to tax US tech companies might provoke US trade war https://www.yemiosinbajo.ng/vps-lecture-at-the-national-defence-college-course-28-lecture-event/ https://punchng.com/digital-firms-to-pay-tax-under-new-finance-act-osinbajo-2/ https://www.nytimes.com/2020/01/31/business/economy/digital-tax-oecd.html Nigeria at risk of trade war with United States as the Nigerian Government says it will impose taxes on technology companies like Facebook, Google, and other digital companies that have been escaping tax payment in Nigeria due to their lack of presence within the country. The US has threatened tariffs on imports from countries that impose such digital taxes. The tech companies with heavy revenue footprint in Nigeria now have their backs against the wall because President Muhammadu Buhari-led administration want to tax them to grow Nigeria’s revenue; which has led to the development of the Finance Act. The Finance Act is the solution of President Buhari to the revenue problem which the Finance Minister, Ahmad Zainab, said Nigeria has. The Nigerian government is looking to grow its revenue through taxes, and one of such is the digital tax which Vice President, Yemi Osinbajo, said will commence despite the threat of the US which is aimed at protecting the silicon companies. No more back door operation: Facebook, Google, Amazon, YouTube and many more digital businesses have a sizeable market in Nigeria, but don’t have a physical structure for their operations; this has cost Nigeria tax revenue. These companies are known to prefer situating their companies in tax havens where taxes are low compared to other African and European countries. Ireland and Bermuda are some of the tax havens for these multinational companies. But according to Osinbajo, the period of making gains from their operation in Nigeria without paying tax is over. Osinbajo, while speaking at The National Defence College, Course 28 Lecture Event, said that, “Let me also briefly mention the new provisions on Taxation of Digital Economy and Non-Resident Companies. This is a very important aspect of our taxation policy. Before the Finance Act, only companies that had a physical presence or a fixed base in Nigeria could be taxed. “So, most digital companies, I mean any of the big technology companies, or multi-national digital companies, that did not have physical offices in Nigeria, made significant income from Nigeria from online activities, such as advertising, movie streaming, online gaming and e-commerce from subscribers in Nigeria, but paid no taxes whatsoever because they did not have a physical base in Nigeria. So now we are no longer relying on the fixed base or physical address criterion.” He added that, “Under the Finance Act, once you have a Significant Economic Presence (SEP) in Nigeria, you are liable to tax. Whether you are a resident here or you are not resident as a company, as long as your economic presence is significant, you are liable to tax. If you are streaming online, advertising using Google adverts, whether you are resident here or not, you are now subject to tax. “So, non-residents who previously had no fixed base and no Nigerian tax liability will now be liable to tax based on the SEP criterion. The Minister of Finance is empowered to issue a regulation defining what Significant Economic Presence means. So, she just defines the scope of what we will be looking out for in terms of Significant Economic Presence.” Osinbajo explained. Nigeria is not alone in this crusade: Nigeria is not the only country trying to tax these technology companies. The European Union have also been coming after them for taxes. The EU is also stating that if the technology companies are making economic gains through their operation despite the lack of physical presence in several European countries, then the tech conglomerates should be taxed. This has led to review of tax laws by the EU. According to a report by New York Times, new rules to tax these multinational companies are being discussed by about 130 countries through the Organization for Economic Cooperation and Development. The review has become necessary as digital economy begins to open new revenue sources. Should Nigeria tread carefully? The United States has threated to hit any country imposing taxes on the technology companies - which are mostly American – with tariffs on import. This put Nigeria at a rather impossible position, as the country is not economically strong enough to enter a trade war or go on a tit for tat battle with the US. According to Q3 report, the US is the fifth biggest export destination for Nigeria, having imported N322.2 billion (6.28%) goods from Nigeria, with crude oil constituting N329.8 billion. Although, the US is behind Ghana, India, Netherlands and Spain, it doesn’t change the significance of the US market to the Nigerian economy. Meanwhile, Nigeria’s top import sources include the U.S, accounting for N747 billion in H1 2019. Franch had moved to tax the online businesses but have now delayed the plan this year after a meeting with the US; the US has also paused its tariff threat against France. Britain is also one of the digital tax drivers. With such threat hanging over the digital tax, it’s unlikely Nigeria will go ahead taxing these technology companies, as US feels such tax is discriminatory against US firms, and have suggested these companies be allowed to decide if they want to operate with the new tax standards., FG will provide succor for daily wage earners as lockdown continues – Osinbajo

Business News11 months ago

Bail-out Fund: FG negotiates with States Governors as NEC approves 100 billion for NLTP

The Federal Government has negotiated with States Governors on the initially planned bulk deductions of bail-out funds.

taxes, tax, IMF, business, FAAC disbursed N617billions in April, as South-South scoop N72billions, VAT, Finance Minister, Zainab Ahmed says Nigeria VAT collection rate is low, NBC, Rite Foods, others to pay new tax as FG identifies new revenue streams ,,Finance Minister reveals how World Bank, AfDB pushed FG into requesting Chinese loan

Business News12 months ago

Nigerians react as Zainab Ahmed receives triumphant entry into Ministry

Zainab Ahmed, Pres. Buhari to review Finance Bill, tax reform yearly to finance budget

Business News2 years ago

Federal, States, LGs got ₦741.843 billion allocation in August

FAAC met in Abuja to disburse ₦741.84bn among tiers of government from revenue generated in August.

Business News2 years ago

Adeosun explains how government intends to pay debt owed contractors

Minister of Finance, Mrs. Kemi Adeosun has assured that the Federal Government would settle the inherited debts and contractual obligations to local contractors between 2006 and...

MSME2 years ago

These new revised guidelines are important if you are an importer

The Federal Ministry of Finance recently issued an addendum to the 2017 Revised Import Guidelines, Procedures and Documentation Requirements under the Destination Inspection Scheme to clarify...

Business News3 years ago

Adeosun denies breaching fiscal responsibility act

The Minister of Finance, Mrs. Kemi Adeosun, said her ministry as well as the Office of the Accountant General of the Federation (OAGF) has always complied...

Business News3 years ago

Why revenue allocation to states dropped.

The Permanent Secretary in the Ministry of Finance,Mr. Mahmoud Isa-Dutse has clarified why the revenue allocation to the 3 tiers of government experienced a shortfall in...

Business News3 years ago

These Five States got the highest share from the N243.7 billion Paris Club refund

The Federal Government has released N243.79 billion as the second tranche of the Paris Club Refund to the 36 state governments and the Federal Capital Territory. With...