Google, Netflix, Facebook, and other international firms operating in Nigeria paid the Nigerian government tax worth N3.85 trillion during the first nine months of 2024.
The sum represents a 68.12% increase over the N2.29 trillion collected in the preceding period of 2023.
The statistic comprises the amount paid in company income tax and value-added tax. This data was collected on Tuesday from the National Bureau of Statistics.
According to the data, the amount collected climbed by 26.21 per cent, from N1.03 trillion in the first quarter to N1.30 trillion in the third. During the second quarter, N1.52 trillion was remitted.
An in-depth examination of the records revealed a huge increase in tax remittance, with businesses contributing N2.57 trillion in CIT from January to September 2024. This was a significant rise of 43.65% above the N1.789tn collected over the same time the previous year.
Furthermore, VAT receipts for the same time were N1.28 trillion, representing a 157.03 per cent increase from N498.34 billion in 2023. This data shows a significant increase in tax revenue, which was powered by an increased collection drive.
According to the Federal Inland Revenue Service, CIT is a 30% tax levied on company profits, whereas VAT is a 7.5% consumption tax paid when goods are purchased and services are delivered and borne by the end user.
Nigeria’s CIT earnings climbed 42.49 per cent quarterly, from N598.13 billion in Q1 to N1.12 trillion in Q2 and N852.29 billion in Q3.
According to VAT collection, Nigeria earned N435.73 billion in Q1, N395.74 billion in Q2, and N448.85 billion in Q3, representing an increase of N13.12 billion, or 3.01 per cent.
Given its widespread acceptability among Nigerians, the Nigerian government announced plans in 2020 to collect taxes from international digital service providers who provide services and earn money in naira.
Some of these service providers, including video streaming services, social networking platforms, and organisations that provide digital material downloads, are required to pay a digital tax to the Federal Inland Revenue Service.
Netflix, Facebook, and Twitter, among others, provide digital video and advertising services to Nigerians despite the fact that they have no actual office in the country.
Others, such as Alibaba and Amazon, make money in Nigeria by processing and transferring data obtained about Nigerian users, delivering goods or services directly or through a digital platform, or providing intermediary services that connect suppliers and customers in Nigeria.
These gains, however, are projected to rise further as other social platforms begin to pay their statutory obligations to the government.
Last Monday, the National Information Technology Development Agency stated that TikTok and X (previously Twitter) have yet to comply with Nigeria’s tax filing requirements.
However, Google, LinkedIn, and Meta have completed their tax compliance duties as defined in Part III, Sections 3-1, and Part II, Section 10 of the “Code of Practice for Interactive Computer Service Platforms and Internet Intermediaries (CoP for ICSP/II).”
Former Accountant-General of the Federation Oluwatoyin Madein indicated earlier this year that tax collection is now the country’s largest source of income.
Madein stated that because of the large revenue generated by taxes, members of the federation account allocation committee eagerly await monthly data from the Federal Inland Revenue Service since these monies are critical for distribution among the three levels of government.
“Today, tax revenues constitute the federation’s largest source of revenue. At the federation account allocation committee meetings, we eagerly await the data from the FIRS since the performance keeps increasing and brings succour to all tiers of government,” she added.
The government set a tax income target of N19.4 trillion for 2024, with remittances exceeding ₦18.5 trillion.
