From January next year, users of facebook in Nigeria will be required to pay Value Added Tax (VAT) for the service.
Specifically, the tax will be charged those that use the platform to market or sell their products or services.
Facebook has already started notifying its users of this development via email.
With the development, Nigerians will now pay a VAT at the applicable rate of 7.5 percent.
Some of the email to Facebook users reads: “Due to implementation of a Value Added Tax (VAT) in Nigeria, Facebook is required to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes.
“All advertisers with a business country of Nigeria will be charged an additional 7.5% VAT on advertising services purchased beginning 1 January 2022.
“If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts. In the event that you’re entitled to recover VAT, this may help you recover any VAT you paid to the Nigerian tax authorities if you are a VAT registered business in Nigeria”.
The new tax regime, it was learned, is pursuant to the Companies Income Tax (Significant Economic Presence) Order introduced in 2020 as an amendment of the Finance Act 2019.
The document imposes tax on any “foreign entity with respect to certain services or digital transactions tax foreign digital service providers offering services to Nigerians and earning revenue in naira.
Also, this is carried in the Finance Bill 2021, which scaled second reading at the Red Chamber of the National Assembly (NASS) on Wednesday.
The Federal government has in recent times decended hard on social media platforms, especially Twitter.
It slammed an indefinite suspension on the operations of the microblogging platform in the country, citing activities capable of undermining the country’s corporate existence.
The suspension is yet to be lifted, although the government says Twitter has met most of the conditions spelt out for its resumption of operations in Nigeria.
In the new dispensation, social media platforms including Twitter, YouTube, LinkedIn, Instagram, among others, are to be captured into the CIT.
All foreign digital companies involved in transmitting, emitting, or receiving signals, sounds, messages, images or data of any kind including e-commerce, app stores, and online adverts will also be captured into the CIT net.