The Federal Inland Revenue Service has received criticism over its decision to impose taxes on social media activities.
Chairman of the agency, Muhammad Nami in his speech at the ongoing meeting between the Senate Joint Committees working on the Medium Term Expenditure Framework and Fiscal Strategy Paper, and heads of revenue-generating agencies of the Federal Government expressed plan of adding businesses on the social media to its tax net.
Nami disclosed that the proposed amendments to the Finance Act would also affect the Stamp Duty Act because some of the provisions were already obsolete.
He said “You are aware of the issues of the digital economy and the challenges of policing the digital taxpayers like Twitter and Facebook. So, we are going to come up with the rules and provisions that the National Assembly will passionately look at and approve for us so as to bring them to the tax net. We want to see a way of taxing online activities and businesses.”
Also commenting on stamp duty, Nami said “The Stamp Duty Act came into being in 1962 and the figures in that Act are obsolete. For instance, some of the dutiable instruments which are about 100 are in the region of 10 kobos or 15 kobos. In real-time, it cannot give us any significant revenue and we would not be able to generate additional revenue for the government. If for instance, we are spending N5 to print an adhesive stamp when the tax it would be used to administer is 15 kobo, I think there would be no need for us to collect that tax in the first place. These and more are some of the things that we have identified so that in line with the way business processes are changing, we have to adjust the law to make tax payment simple and enable us to block leakages and mobilise revenue for the three tiers of government. We are not really increasing or reducing some of the rates but changing the figures to reflect the current reality.”
The Executive Director of Civil Society Legislative Advocacy Centre, Auwal Rafsanjani has however condemned the proposal. Rafsanjani said the plan will affect the businesses of young Nigerians who are struggling to survive.
He said “There are many avenues which the FIRS can explore in order to generate income. The agency should not impose an additional burden on young Nigerians who are just struggling to survive and making use of social media to transact their businesses. The FIRS should concentrate on taxing the companies that are making profits from adverts and not individuals that subscribe to those social media platforms. Individuals who subscribe to those platforms and showcasing their businesses there should not be taxed. The tax should be on corporate entities that are making profits.”
Founding Director of Women Advocates Research and Documentation Centre, Dr Abiola Akiyode-Afolabi also described it as another plot to shut the social media against the people.
However commenting on this, Chairman of the Senate Committee on Finance and Coordinator of the joints panels of the red chamber working on the MTEF/FSP, Senator Solomon Adeola said the proposal would help the FIRS meet its revenue projection of N10tn in 2022.