In the first six months of 2024, foreign companies operating in Nigeria, including Google, Facebook, and Netflix, paid a whopping N2.55 trillion in taxes to the Federal Government. This represents a 158.76% increase from the N985.27 billion collected in the same period in 2023.
According to data from the National Bureau of Statistics, the taxes paid include Company Income Tax (CIT) and Value Added Tax (VAT). CIT is a 30% tax on companies’ profits, while VAT is a 7.5% consumption tax paid on goods and services.
The Federal Inland Revenue Service (FIRS) reported that CIT payments totaled N1.72 trillion, while VAT payments reached N831.47 billion between January and June 2024. This significant revenue boost contributed over 45.3% to the N2.4 trillion collected in the second quarter.
The Nigerian government had previously announced plans to collect taxes from foreign digital service providers operating in the country. These companies, including video streaming sites and social media platforms, are now required to pay digital tax to the FIRS.
Some of these foreign companies, such as Alibaba and Amazon, generate revenue from Nigeria through data processing, digital content downloads, and advertising services. In 2022, the government introduced a 6% tax on turnover for offshore companies providing digital services to local customers.
Finance Minister Wale Edun recently revealed that the Federal Government’s revenue for the first quarter of 2024 increased to N9.1 trillion, more than doubling the amount recorded in 2023 without increasing taxes.
This significant tax revenue boost demonstrates the government’s efforts to ensure foreign companies contribute to Nigeria’s economy. The taxes collected will likely support various development projects and initiatives across the country.
