Google, Facebook, and Others Contribute N3.8tn in Taxes to FG – Report
Foreign companies like Google, Netflix, Facebook, and others operating in Nigeria paid a total of N3.85 trillion in taxes to the Federal Government in the first nine months of 2024, according to a report by The PUNCH. This marks a significant 68.12% increase compared to N2.29 trillion collected during the same period in 2023.
The tax collection includes Company Income Tax (CIT) and Value Added Tax (VAT), with data sourced from the National Bureau of Statistics. The report shows that tax remittance improved significantly, with CIT contributions totaling N2.57 trillion, a 43.65% increase from the N1.79 trillion collected in 2023. VAT collections reached N1.28 trillion, reflecting an impressive 157.03% surge from N498.34 billion in 2023.
In terms of quarterly performance, CIT collections rose by 42.49%, from N598.13 billion in Q1 to N1.12 trillion in Q2, with a slight drop to N852.29 billion in Q3. VAT collections also showed growth, with Q1 earnings at N435.73 billion, Q2 at N395.74 billion, and Q3 at N448.85 billion, marking a 3.01% increase.
The Federal Inland Revenue Service (FIRS) confirmed that CIT is a 30% tax on company profits, while VAT is a 7.5% consumption tax. The government began targeting foreign digital service providers for tax collection in 2020, due to the widespread use of services like Netflix, Facebook, and Twitter in Nigeria.
The report highlighted that companies such as Netflix, Facebook, and Twitter, which have operated without physical offices in Nigeria, offer digital video and advertising services to Nigerian users. Others, like Amazon and Alibaba, generate revenue through digital platforms or by providing goods and services directly to Nigerians.
Tax earnings from these companies are expected to rise further as more digital platforms begin to comply with Nigeria’s tax regulations. The National Information Technology Development Agency (NITDA) recently noted that TikTok and X (formerly Twitter) have not yet fulfilled their tax obligations under Nigeria’s regulatory framework.
However, companies like Google, LinkedIn, and Meta have met their tax compliance requirements, in accordance with the Code of Practice for Interactive Computer Service Platforms and Internet Intermediaries (CoP for ICSP/II).
Earlier this year, the former Accountant-General of the Federation, Oluwatoyin Madein, emphasized that tax revenue has become the nation’s largest source of income, contributing significantly to the federation account. She noted that the monthly tax figures from FIRS are eagerly awaited, as they are crucial for the distribution of funds among the three tiers of government.
The FIRS has set a tax revenue target of N19.4 trillion for 2024, and the service has already surpassed N18.5 trillion in collections.
