From 1 January 2020, there is a proposal to increase the VAT rate from 5% to 7.5%. The change in the VAT rate would coincide with an imposition of registration and filing obligations for foreign services providers, including technology services providers.
In addition to the planned legislative change, the Federal Inland Revenue Service (FIRS) is also planning to introduce an administrative change from January 2020 by appointing banks and credit card companies in the country as agents to collect VAT on all e-commerce goods and service transactions. This may become the new mode of collection, instead of collection by suppliers, in order to avoid duplicated VAT collection. It would also apply to both resident and non-resident providers of these types of goods and services.
It is proposed that the tax would be levied when the sale is made from the online marketplaces (such as Amazon, eBay, Facebook, Instagram, Jumia and Konga, for example).
For further information please contact Kenneth Erikume
Email: kenneth.y.erikume@pwc.com
Image source: Unsplash.com
Pingback: 7.5% VAT rate proposed from Jan 1 2020 and new VAT obligations for delivery of e-commerce goods and services transactions - VATupdate