BBY EDMOND ODOK – Civil Society Organisations (CSOs) have delivered hard knocks on the Federal Inland Revenue Service (FIRS) for proposing to tax social media activities in Nigeria.
Certainly not finding the FIRS’ proposal palatable, the CSOs are insisting that the Service must shun actions capable of inflicting more pains on young Nigerians and their businesses already affected adversely by current economic downturns in the country.
The Federal tax agency is currently seeking the National Assembly’s approval to further amend the Finance Act in order to widen its tax net profile to cover online businesses on social media.
FIRS Executive Chairman, Muhammad Nami, dropped hints on the proposal at the ongoing engagement between heads of government’s revenue-generating agencies and the Senate Joint Committees on Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF).
The MTEF packaging provides the Federal Government with a tool to manage the tension between competing policy priorities and budget realities.
But leading Leading the attack on FIRS’s proposal, Executive Director of Civil Society Legislative Advocacy Centre, Auwal Rafsanjani, warned against measures that would further strangulate businesses of young Nigerians who were struggling to survive the current economic hardship in the country.
According to Rafsanjani; “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.”
He insisted that for the overall good of growing small businesses by young and enterprising Nigerians, “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.”
In her intervention, the founding Director of Women Advocates Research and Documentation Centre (WARDC), Dr Abiola Akiyode-Afolabi described the move as another plot to shut the social media against the people.
Cautioning that “The government can’t make money on everything when it’s not giving people back”, Akiyode-Afolabi said; “While taxation, in theory, is progressive, Nigeria should follow best practices. This is another attempt to shut down the space against the people.”
“This attempt should be resisted; the government should focus on providing good governance for her people, not targeting people for more hardship and exploitation”, she said.
The FIRS Chairman, Nami had, in his engagement with the National Assembly Committees on MTEF, said besides targeting the social media businesses, the proposed amendments to the Finance Act would also affect the Stamp Duty Act because some of the provisions were already obsolete.
Mr Nami informed the lawmakers thus; “You are aware of the issues of digital economy and the challenges of policing the digital tax payers like Twitters 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.”
The FIRS boss, who also told the senators that the Finance Bill was supposed to accompany the annual budget, further said; “We want to see a way of taxing online activities and businesses.”
For him, FIRS is focused on reviewing feedbacks from taxpayers and its internal operations so as to fix the loopholes in the tax law, adding; “The Stamp Duty Act came into being in 1962 and the figures in that Act are obsolete.
“For instance, some of dutiable instruments which are about 100 are in the region of 10 kobo or 15 kobo. In the real time, it cannot give us any significant revenue and we would not be able to generate additional revenue for 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 to change the figures to reflect the current reality.”
Also speaking at the meeting, the Senate Committee Chairman on Finance, who coordinates the joints panels of the red chamber working on the MTEF/FSP, Senator Solomon Adeola, said the proposal is expected to assist FIRS in meeting its projected revenue of N10tn in 2022. – With Punch reports
