Digital Services Tax (DST) in Nigeria Finance Act 2022: Applicability and Scope


The rapid growth of the digital economy has prompted governments worldwide to introduce new taxation frameworks to capture revenue from digital transactions. The Nigeria Finance Act 2022 introduces a Digital Services Tax (DST) aimed at taxing certain digital services provided by non-resident companies. In this article, we will explore the key aspects of the Digital Services Tax, its applicability, and its scope under the Nigeria Finance Act 2022.

What is Digital Services Tax (DST)?

Digital Services Tax (DST) is a tax on revenues generated from specific digital services provided by non-resident companies that have a significant economic presence in a country. The goal is to ensure that these companies contribute to the local tax base, reflecting the value they derive from digital transactions within the jurisdiction.

Applicability to Non-Resident Companies:

The DST provisions in the Nigeria Finance Act 2022 target non-resident companies that provide digital services to Nigerian customers but do not have a physical presence in the country. This includes companies engaged in online advertising, digital content sales, data processing, and other digital services.

Economic Threshold for Applicability:

The Act specifies an economic threshold that triggers the applicability of DST. Non-resident companies must have a yearly gross turnover of more than 25 million Naira from the provision of digital services to Nigerian customers to be subject to DST.

Scope of Digital Services:

The DST provisions cover a range of digital services, including but not limited to:

  • Online advertising services
  • Subscription-based digital content (e.g., streaming services)
  • Data processing and data storage services
  • Provision of search engines and social media platforms
  • Transmission of data collected about users

Registration and Compliance:

Non-resident companies meeting the economic threshold are required to register for DST with the Nigerian tax authorities. They must also file regular returns and remit the DST payments to the tax authorities.

Impact on the Digital Economy:

The introduction of DST has implications for the digital economy. Companies providing digital services may need to reassess their pricing strategies, considering the additional tax burden. Additionally, the tax may influence business models and investment decisions.

Double Taxation Treaties:

DST provisions need to be considered in the context of double taxation treaties (DTTs) that Nigeria has with other countries. DTTs may impact the application and rates of DST for companies based in treaty partner countries.


The Digital Services Tax introduced by the Nigeria Finance Act 2022 is a response to the evolving nature of the digital economy and the need to ensure a fair taxation framework. Non-resident companies providing digital services to Nigerian customers should carefully assess their revenues, understand the economic threshold, and determine their obligations regarding registration, compliance, and payment of DST.

As a trusted accounting firm, we advise businesses operating in the digital economy to stay informed about the DST provisions, assess their impact on operations, and seek professional guidance to ensure compliance with the Act’s provisions. By doing so, companies can navigate the complexities of digital taxation, contribute to the Nigerian tax base, and support the development of a modern and equitable tax system.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, . You can also reach us via WhatsApp at +2348038460036.