Buhari has ordered FIRS to tax digital transactions, says SGF

President Muhammadu Buhari has ordered the deployment of technology to tax digital transactions carried out across the country.

Boss Mustapha, the secretary to the government of the federation (SGF), said the president directed the Federal Inland Revenue Service (FIRS) to ensure that digital transactions are taxed.

He spoke on Tuesday at the 17th general assembly and 10th anniversary of the West Africa Tax Administration Forum (WATAF) in Abuja.

The SGF said FIRS had been empowered to carry out the mandate by the president and the federal executive council (FRC).

“Nigeria is putting in place measures to ensure that we keep up to date with these developments and answer the question of what to collect and how to collect it, as far as the digital economy is concerned,” he said.

“Therefore, our definition of what to collect- whether we call it income tax, Digital Service Tax or Value Added Tax, must address the issue of redefining who a taxable person or entity is, to accommodate the fact that digital transactions side-track the ordinary and traditional understanding of jurisdiction.”

Also speaking, Mohammed Nami, the FIRS chairman, said tax regulators and industry stakeholders must rise to the challenge of taxing transactions carried out digitally.

“When you speak of taxing the digital economy, you are talking about an economy without physical borders, trade and commerce that transcends our natural geographical delineations,” he said.

“In terms of tax administration, the only way that this can possibly be done with any accuracy and effectiveness is if it is done digitally, since the commercial activity itself is also done digitally.

“Tax regulators and other industry stakeholders must therefore rise up to the challenge of being in a position to tap into the stream of opportunity that advancements in science and technology afford us.”