Vice President, Yemi Osinbajo says multinational digital companies operating abroad with significant economic presence in Nigeria will be subjected to taxation under the new Finance Act.
Osinbajo disclosed this on Friday in Abuja during a lecture titled: “Economic Dimension of National Security: The Nigerian Experience”, organised for participants of Course 28 of the National Defence College.
According to him, before the Finance Act, only companies that have physical presence or fixed address in Nigeria are being taxed. “So, most digital and multinational technology companies do not have physical presence in Nigeria, yet make significant income in Nigeria from online activities.
“They pay no tax to Nigeria because they do not have physical presence in Nigeria, now we are no longer relying on physical presence. Under the new Act, once you have a significant economic presence in Nigeria, you are liable to tax whether you are resident here or not,” he said.
He said that non residents, who previously had no fixed address would now be taxed under the new Act. The vice president said that the Finance Act was designed to generate more revenue for government and improve the ease of doing business in Nigeria.
He noted that adequate provisions were made under the Act to protect the Small and Medium Scale businesses in view of their roles in national development.
Osinbajo said the economic policies of the Federal Government were centred on creating conducive environment for the private sector to strive and support towards creating wealth, jobs and opportunities.
“Private sector is key to job creation and in doing so, government has responsibility to provide the needed infrastructure and enabling environment.
“Before the private sector is able to provide sufficiently for the majority of people, it is the responsibility of government to provide safety net for the extremely vulnerable and those who cannot work. This is the premise upon which our social investment policy was derived,” he said.
Osinbajo said that the security as well as welfare of citizens was the primary purpose of government, adding that the economy was central to human security.
He said that human security was beyond absence of war and conflict but the availability of basic needs of man, food, shelter and clothing.