Google, Netflix, Facebook, and other foreign companies operating in Nigeria paid N3.85 trillion in taxes to the Federal Government during the first nine months of 2024, according to a report by The PUNCH.
This represents a significant 68.12% increase from the N2.29 trillion collected during the same period in 2023. The total includes payments for Company Income Tax (CIT) and Value Added Tax (VAT), based on data from the National Bureau of Statistics (NBS).
The report reveals a steady rise in tax remittances, with collections growing by 26.21% from N1.03 trillion in Q1 2024 to N1.30 trillion in Q3 2024. In the second quarter, the government received N1.52 trillion in taxes.
A closer analysis of the data shows a remarkable increase in CIT collections, which reached N2.57 trillion from January to September 2024. This is a 43.65% rise compared to the N1.79 trillion collected in the same period in 2023. VAT collections surged by 157.03%, reaching N1.28 trillion, up from N498.34 billion in 2023, reflecting a significant growth in tax revenue.
The Federal Inland Revenue Service (FIRS) notes that CIT is a 30% tax on companies’ profits, while VAT is a 7.5% consumption tax borne by the final consumer on goods and services.
On a quarterly basis, CIT collections rose by 42.49%, from N598.13 billion in Q1 to N1.12 trillion in Q2, and N852.29 billion in Q3. VAT collections for the same period were N435.73 billion in Q1, N395.74 billion in Q2, and N448.85 billion in Q3, with a modest increase of N13.12 billion or 3.01%.
In 2020, the Nigerian government began efforts to collect taxes from foreign digital service providers earning revenue in the country, such as streaming platforms, social media sites, and companies offering downloadable content. Companies like Netflix, Facebook, and Twitter, which do not have a physical presence in Nigeria, are among those expected to pay digital taxes.
Other platforms, including Alibaba and Amazon, also generate revenue by processing data or offering goods and services to Nigerian users. The tax earnings from these companies are expected to increase further as more foreign firms comply with their obligations.
Recently, the National Information Technology Development Agency (NITDA) noted that platforms like TikTok and X (formerly Twitter) have yet to fulfill Nigeria’s tax filing requirements. However, companies such as Google, LinkedIn, and Meta have complied with the necessary tax regulations.
Earlier this year, former Accountant-General of the Federation Oluwatoyin Madein revealed that tax revenue has become the nation’s largest source of income, surpassing other revenue streams. Madein emphasized that the continued increase in tax revenue provides crucial funds for the Federation Account, benefiting all levels of government.
The government has set a tax revenue target of N19.4 trillion for 2024, with the FIRS exceeding expectations, having already remitted over N18.5 trillion.
