American tech giant, Google to commence 7.5% VAT charges in April

The American tech behemoth, Google will now charge Nigerian customers 7.5% VAT on all taxable goods and services starting April 1, 2022.

The company announced this recently in an email sent out to its business account holders.

“Due to new legislation in Nigeria, starting April 1, 2022, Google will be required to charge 7.5% VAT on all taxable goods and services. No action is required on your side with regard to your Google business account,” Google said in the email.

Google said the 7.5% VAT is in line with the Nigerian government’s new law.

In January 2022, the Nigerian government mandated all non-resident digital firms to pay a VAT 6%.

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Mrs. Zainab Ahmed, Minister of finance, budget and national planning said that the new tax is stated in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.

The minister said that Section 4 of the Act made provisions for the taxation of e-commerce businesses by non-resident companies on a fair and reasonable turnover basis, set at 6% of turnover.

This new enforcement of this tax underscores the government being out of step with its direction and its people.

The Special Adviser to the President on Media and Publicity, Femi Adesina, said the Finance Bill has five strategic objectives. “These objectives are; Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.”

Google signaled that it will not be saying anything further on the matter advising business account holders to contact their tax advisers.

“Google can’t advise you on tax matters, so please contact your tax adviser for any questions regarding this change,” it said in the mail.

Zoom and Facebook’s parent company META have also implemented the 7.5% VAT on Nigerian customers.