Over-the-top (OTT) services providers such as YouTube, Facebook, Twitter, WhatsApp, Blackberry Messenger and many others, will soon be required to declare the revenue they generate from Nigerian consumers and pay taxes.
This is one of the major fallouts of the new finance Act which now subject all multinational digital companies operating abroad with significant economic presence in Nigeria to taxation.
By the move Nigeria is following the steps of many countries, which have policies that guide these services.
Confirming this, Vice President Yemi Osinbajo, explained that only companies that have a physical presence in the country were being taxed previously, adding that the new law had changed this.
He said, “So, most digital and multinational technology companies do not have a physical presence in Nigeria, yet make significant income in Nigeria from online activities. They pay no tax to Nigeria because they do not have a 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 noted.
Taxation will definitely serve as a means to curb these excesses of the OTTs while also boosting Nigeria’s tax base.
For Association of Telecommunications Operators of Nigeria (ALTON), the umbrella body of telecom operators in the country, it is not right that a company providing traditional telecommunications services has to meet certain regulatory requirements, like those concerning data protection and taxes while a company providing comparable services over the web does not.
Gbenga Adebayo, chairman, ALTON, recently said that “We are beginning to see the need for regulators to look at regulating technology instead of services.
“These over-the-top services have social, economic and security implications. If they are not licensed, it means they are not regulated, and in that case, there is no limit to the scope of what they can do. There is also no control over services and content they may provide,” he said.
Nigerian Communications Commission (NCC) which hitherto has insisted on technology neutrality of the OTTs may be forced to facilitate the revenue generating process with the right technological devices to ensure transparency.