Expert says 5% VAT on digital economy is not double taxation

Peter Nwaobi, a tax expert at KPMG, said the proposed 5% VAT on online purchase is not a double tax and there were no initial charges on purchases.

Nwaobi explained that for every online transaction, there is always a 5% VAT on every item.  “Before now, for every time you get online, the merchant already charged 5% VAT on it, either you see it on slip or not. it is there.”  He said the fee is what the FIRS is running after as majority of the funds have not been captured in the tax net. “This idea will allow the merchant to remit the 5% they have charged to the bank (acting an agent in this instance).” The government said it is planning to introduce the policy in 2020. The Ministry of Industry, Trade and Investment projected the Nigerian digital sector to generate $88 billion and create 3 million new jobs over the next few years.


Source: Pulse