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Twitter, Facebook, Google, others now to pay tax in Nigeria

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The Senate on Tuesday passed the Finance Bill 2021, transmitted to the National Assembly by President Muhammadu Buhari, on December 7, 2021.

The passage by the Upper Chamber of the National Assembly, followed the consideration of a report by the Senate Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment.

One of the major highlights of the Bill is the aspect empowering the Federal Inland Revenues Service (FIRS) to assess non-resident firms like Twitter, Facebook, Google,  and Netflix, among others.

They are to be taxed  on fair and reasonable turnover earned from digital services to Nigerian customers.

The Finance Bill further mandates FIRS to appoint persons for the purpose of collection and remittance of non-resident taxes.

In his presentation, Chairman of the Joint Committee, Senator Solomon Adeola, said the Bill seeks to support the implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key specific taxation, such as Customs Duties, fiscal charges and other relevant laws.

Adeola, representing Lagos West, said a total of 12 Acts were amended under the Finance Bill which contains 39 clauses.

He said the Bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and the capital market and support small businesses with a view to increasing government’s revenue.

“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID -19 impact on the economy, as such, it was structured across four broad thematic areas; Enacting counter cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility and public procurement reforms; Reforming fiscal incentives policies for job creation; ensuring closer coordination of monetary, trade and fiscal policies and Enhancing tax administration,” Adeola said.

The committee based on its observations, recommended five per cent Capital Gains Tax to be imposed on shares’ disposal transactions where gains exceed N250 million in 12 months.

It recommended that Gaming and Lottery companies be taxable, as it applies to oil and gas companies.

The Bill underscored the need for midstream and downstream oil and gas companies to be liable to corporate tax, without the benefit of tax exemptions for firms exporting goods to earn foreign exchange.

The Bill equally sought more powers for the Federal Inland Revenue Service (FIRS) to collect the Nigeria Police Trust Fund (NPTF) levies on Nigerian companies and to streamline tax, levy collection from Nigerian companies in line with the administration’s ease of doing business reforms.

The committee stressed the need for the Federal Government to ensure that FIRS deploys both proprietary and third-party tech applications to collect information from taxpayers, enhance confidentiality and non-disclosure and to enable them investigate tax evasion and other crimes and sanction tax defaulters.

The Bill further empowers FIRS to assess and tax non-resident firms on fair and reasonable turnover basis on revenue earned from digital services to Nigerian customers, with a further mandate to appoint persons for the purpose of collection and remittance of non- resident taxes.

The committee demanded necessary reforms on securities lending transactions, minimum tax for insurance companies and companies in general, taxation of unit trust income, real estate investment trust, and insurance companies capitalization by NAICOM in line with tax equity.

It urged the government to mandate FIRS as principal tax revenue collection agency, to collaborate with law enforcement agencies and MDAs in streamlining tax collections by enhancing public financial Management reforms.

According to the joint committee, doing so would reduce revenue leakages and better track actual expenditure to revenue performance in line with the provision of the 1999 Constitution of the Federal Republic of Nigeria (as Amended), Fiscal Rules and other Extant Money Acts.

It also called for the diversification of Nigeria’s revenue from oil to other sectors to fund critical expenditures.

The committee demanded an increase of 0.5 per cent in education tax, pushed for close monitoring of unfolding development and policies on VAT, tax incentives, projected increase tariff on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education and security, with the possibility of introduction of new taxes, tariffs and levies as the economy recovers.

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Google set to invest $9.5bn in US

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Google has announced plans to invest $9.5bn in its US offices and data centers around the country in 2022, up from more than the $7bn it spent in 2021.

According to CNN, the big bet on office space was coming at a point Google was embracing a hybrid work model. The Alphabet-owned company has called for many of its employees to work in an office three days a week after two years of being fully remote.

The Chief Executive Officer of Alphabet and Google, Sundar Pichai, said, “It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work.

“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.”
Google said it would open an office in Atlanta this year and continue to develop and expand office space in Austin and New York. It added that it planned to continue investing in data centers in Iowa, Nebraska, and Tennessee, among other states.

As part of the announcement, Google said it expected to create at least 12,000 new full-time jobs at the company this year.

Google and other tech companies were among the first businesses to shift to remote work when the pandemic hit in early 2020. But that shift always appeared to be temporary. Like others in Silicon Valley, Google had previously invested billions in expansive campuses and lavish office benefits for workers.

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European markets pull back amid doubts over latest Russian pledges over Ukraine

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European stocks retreated on Wednesday following the latest round of talks between Russia and Ukraine, aimed at finding a solution to the conflict.

The pan-European Stoxx 600 fell 0.8% in early trade, with autos shedding 1.9% to lead losses, while oil and gas stocks gained 1.7%.

In terms of individual share price movement, Finland’s Nokian Tyres fell 6.6%, while Sweden’s Lundin Energy added 4.7%.

Investor sentiment was boosted on Tuesday following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital.

Alexander Fomin, who spoke following the talks in Istanbul, said Russia would slow its military operations near Kyiv and Chernihiv in order for peace talks to progress. Russia previously claimed that it would reduce military operations in other parts of Ukraine but then continued its advance.

Growing hope for a cease-fire appeared to boost investor sentiment Tuesday, as Dow Jones Industrial Average futures rose 200 points, or 0.6%. S&P 500 futures also climbed 0.6%, while Nasdaq 100 futures climbed 0.7%. Meanwhile, the price of U.S. benchmark West Texas Intermediate crude oil, which spiked on the heels of Russia’s invasion of Ukraine, fell more than 4% to $100 per barrel.

Doubts have set in over the pledge, however, and while the Russian military has begun moving some of its troops in Ukraine away from areas around Kyiv to positions elsewhere in Ukraine, Pentagon Press Secretary John Kirby warned the troop movements do not amount to a retreat.

Shares in Asia-Pacific were mixed in Wednesday trade as investors watch for developments surrounding the war in Ukraine. Stateside, traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes.

The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday.

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Lagos Assembly kicks against harassment of residents by police

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Lagos State House of Assembly Speaker, Mudashiru Obasa, yesterday, cautioned police in the state against harassment, intimidation and extortion of residents.

Obasa said this on the floor of the House when lawmakers honoured outgoing Commissioner of Police, Mr. Hakeem Odumosu, who has been promoted to Assistant Inspector-General, and is due to retire in January 2022.

Obasa said Odumosu was honoured as the first Commissioner of Police in the state to stand before the lawmakers and address Lagosians on his experience policing the state.

The Speaker thanked Odumosu for his openness and responsiveness to issues affecting the peace of the state.

“It is important to call on those behind you to know that the relationship between the police and the people need to be constantly improved upon,” Obasa said, adding that men of the Nigeria Police Force need to build more trust among the people.

“Everybody must be treated with respect, dignity and honour. And that is how we can earn respect. Policing should not be about harassment and extortion but building trust among the people and making them comfortable,” Obasa said.

The Commissioner of Police, who led a team of officers to the House, thanked the lawmakers for their support. According to him, nothing could have been achieved in terms of security and peace in the state without assistance of the House.

He said he would remain grateful to Lagosians for making it possible for him and his team to effectively manage the security of the state.

Odumosu, who described Lagos as ‘mini-Nigeria’, said proactivity of the Assembly led to the creation of laws that helped the police remain successful in the state.

He said the Cultism Prohibition Law also helped to reduce illegal associations in tertiary institutions in the state and enlightened property owners and residents.

“We promise to continue to excel in providing watertight security for people of the state,” he told the lawmakers. He also promised he would encourage his successor to sustain the relationship between the police and the House, while urging the lawmakers to extend their support to his successor.

“Policing Lagos is not a tea party. Without the laws in Lagos, it would have been difficult to police the state. Don’t get tired, don’t relent in making laws that would make Lagos maintain its place as the most peaceful state in Nigeria,” he said.

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