Nigeria captures foreign tech firms in its tax net

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Nigeria has joined the growing list of African countries that are effectively capturing their previously untapped digital economies within their tax base. This is in a bid to grow revenue from a sector that has experienced phenomenal growth.

For example, according to a 2022 report by the social media management platform Hootsuite, ad-serving giants Google, Meta, and Youtube ranked the first, third, and thirteenth most visited sites in Nigeria in November 2021 with 80 million, 26 million, and 7 million site visits that month alone.

Despite these impressive numbers, the government could not draw earnings made by these companies serving online ads and other services to tens of millions within its jurisdiction. But that has changed now.

On Tuesday Mar. 1, Google notified its business account users in Nigeria that it will begin collecting 7.5% value added tax. The email, seen by Quartz reads “Due to new legislation in Nigeria, starting April 1, 2022, Google will be required to charge 7.5% VAT on all taxable goods and services.”

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